According to Angel Broking, Rupee is likely to trade negative as the hawkish tone in the US Fed Chairwoman‘s speech and FOMC Meeting Minutes will boost the demand for the DX in turn keeping the INR pressurized.
US DOLLAR INDEX (USD)
The US Dollar Index traded higher by more than 1 percent in the last week’s trading session. Reason for the same could be attributed to the robust release of economic datasets from the nation like retail sales, unemployment claims and Producer Price Index from the nation. Moreover, the hawkish tone in the US Fed Chairwoman’s speech and FOMC Meeting Minutes boosted the demand for the DX. Both indicated at the possibility of a rate hike in the near future. The policy members were divided in their views over the labor market ultimately agreeing to US Fed Chairwoman’s argument for holding the interest rates at its present levels for now. Several voting Fed policymakers thought rates should rise 'relatively soon'. As per Fed funds futures, traders see about 11 percent chance of rate hike in Nov’16 and about 66 pct chance in December. All the above factors boosted the demand for the DX which made a weekly high of 98.12 and closed at 98.00 levels on Friday.
Rupee is likely to trade negative as the hawkish tone in the US Fed Chairwoman’s speech and FOMC Meeting Minutes will boost the demand for the DX in turn keeping the INR pressurized.
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