It has been somewhat of a muted reaction for rupee after the FOMC meet overnight and gains in the US dollar. I do not rule out a prepared Reserve Bank of India (RBI) ready to intervene.
FOMC meet has indicated that whenever interest rates start to rise it will be at a much faster pace than markets expect. There has been no change in the language. Traders are expecting Fed funds rates to rise to 1.3750 by end 2015. There is some section which believes that Federal Reserve will raise interest rates (till 2017) in every meeting once it starts to raise interest rates. The US debt market could go bust if there is continuous interest rate hike by the Federal Reserve in every meeting. There can be an interest rate hike by the Federal Reserve in every meeting in 2015, but thereafter in 2016, I expect very few interest rates hike. 2016 is an election year in USA. There will be political implications if US interest rates rise at the pace as the investors now perceive (after FOMC meet).
The Scottish Independence vote can still add some support. The margin between a “yes” vote and “no” vote will be key to me. The narrower the gap the better it will be for cable and euro bears.
The big question now is whether euro/usd is able to fall below 1.2740 and usd/jpy is able to break and trade over 110.00. The next set of big moves will come if and only if euro/usd trades below 1.2740 and/or usd/jpy trades over 110.00. If this does not happen in the next two weeks, I expect the US dollar to get weak.
Usd/inr September 2014: It needs fall below 60.96 or break and trade over 61.37 for direction. Jobbers watch 61.20 all the time.
Euro/inr September 2014: It needs to trade over 78.72 for further gains to 79.42. There will be sellers on rise as long as euro/usd does not break 78.72 with 78.1450 as the key support.
Gbp/Inr September 2014: It needs to trade over 99.31 to rise to 99.7850 and 100.68. Initial support is at 99.19 and there will be sellers if cable trades below 99.19 in UK session.
Jpy/Inr September 2014: It needs to trade over 56.40 to rise to 56.86 and 57.18. There will be sellers below 56.40 to 56.1375 and 55.9275. Jobbers watch 56.40 all the time.
FOMC meet has indicated that whenever interest rates start to rise it will be at a much faster pace than markets expect. There has been no change in the language. Traders are expecting Fed funds rates to rise to 1.3750 by end 2015. There is some section which believes that Federal Reserve will raise interest rates (till 2017) in every meeting once it starts to raise interest rates. The US debt market could go bust if there is continuous interest rate hike by the Federal Reserve in every meeting. There can be an interest rate hike by the Federal Reserve in every meeting in 2015, but thereafter in 2016, I expect very few interest rates hike. 2016 is an election year in USA. There will be political implications if US interest rates rise at the pace as the investors now perceive (after FOMC meet).
The Scottish Independence vote can still add some support. The margin between a “yes” vote and “no” vote will be key to me. The narrower the gap the better it will be for cable and euro bears.
The big question now is whether euro/usd is able to fall below 1.2740 and usd/jpy is able to break and trade over 110.00. The next set of big moves will come if and only if euro/usd trades below 1.2740 and/or usd/jpy trades over 110.00. If this does not happen in the next two weeks, I expect the US dollar to get weak.
Usd/inr September 2014: It needs fall below 60.96 or break and trade over 61.37 for direction. Jobbers watch 61.20 all the time.
Euro/inr September 2014: It needs to trade over 78.72 for further gains to 79.42. There will be sellers on rise as long as euro/usd does not break 78.72 with 78.1450 as the key support.
Gbp/Inr September 2014: It needs to trade over 99.31 to rise to 99.7850 and 100.68. Initial support is at 99.19 and there will be sellers if cable trades below 99.19 in UK session.
Jpy/Inr September 2014: It needs to trade over 56.40 to rise to 56.86 and 57.18. There will be sellers below 56.40 to 56.1375 and 55.9275. Jobbers watch 56.40 all the time.
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