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TD Securities’ Jayati Bharadwaj expects a divided Congress to keep macro fundamentals as the main driver for FX, maintaining a modestly bearish view on the Dollar into year-end. The bank argues fiscal gridlock should narrow U.S.-RoW growth and rate differentials while supporting institutional credibility. A Democratic sweep is seen as initially USD-positive, whereas continued GOP control is viewed as the most USD-negative outcome.Gridlock keeps macro in control”We expect a divided Congress, leaving macro fundamentals as the primary driver of FX and supporting our modestly bearish USD view into year-end.””Modestly bearish to neutral USD. Fiscal gridlock reduces the scope for further…
Commerzbank’s Antje Praefcke highlights uncertainty over whether Norges Bank will hike in September or wait until December. Inflation remains above target despite a recent downside surprise, while growth is described as close to normal. The regional network survey is seen as decisive, with Oil prices and Middle East developments still the main drivers for NOK.Norges Bank decision and NOK drivers”Up in the far north, in Norway, things are also likely to be interesting whether Norges Bank will raise its policy rate as early as September or choose to wait and see.””Furthermore, inflation remains well above the 2% target (the headline…
The rupee fell 3 paise to 95.91 against the US dollar in early trade on Wednesday, facing pressure from a strong American currency and outflow of foreign funds.Positive domestic equity markets, however, supported the local currency, even as crude oil prices remained elevated amid heightened tension in West Asia, forex traders said.At the interbank foreign exchange market, the rupee opened at 95.89 against the US dollar and fell further to 95.91, trading 3 paise lower from its previous close.The rupee settled 34 paise lower at 95.88 against the American currency on Tuesday, after weakening by 113 paise or more than…
USD/CHF halts its five-day winning streak, trading around 0.8180 during Asian hours on Wednesday. The pair inches lower as the US Dollar (USD) depreciates ahead of the interest rate decision by the Federal Reserve (Fed).However, the Greenback may rebound as hotter-than-expected, released last week, US inflation data that solidified expectations of further monetary tightening by the Federal Reserve. Financial markets broadly anticipate a 25 basis point rate hike at the upcoming policy meeting, which would lift the benchmark overnight rate to a range of 3.75% to 4.00%. Data from the CME FedWatch tool indicates that traders are pricing in nearly…
The rupee has fallen for seven straight sessions, shedding about 1.5% despite the RBI’s interventions to support it | Photo Credit: spawns The Indian rupee is likely to remain under pressure on Wednesday, with a Federal Reserve rate hike later in the day adding to the strain from high oil prices.The rupee is expected to open marginally weaker and is at risk of slipping past the 96 mark, traders said, after settling at 95.9550 to the dollar on Tuesday.The local currency has fallen for seven straight sessions, shedding about 1.5% despite the central bank’s near-daily intervention to support it.The slide…
The dollar was hanging on to recent gains on Wednesday and trading near multi-week highs on a handful of major peers ahead of a Federal Reserve decision where traders expect the first of what could be several U.S. interest rate hikes.”A 25 basis-point increase is about 90% priced, implying the dollar will receive a modest boost if the Fed increases,” said Carol Kong, currency strategist at the Commonwealth Bank of Australia in Sydney.”There is a small chance the dollar eases if the (Fed) hikes but (chair Kevin) Warsh plays down the risk of follow-up hikes in the press conference. In…
The USD/JPY pair holds steady near 155.25 during the early Asian session on Wednesday. Traders prefer to wait on the sidelines ahead of the US Federal Reserve (Fed) interest rate decision later on Wednesday. On Friday, attention will shift to the Bank of Japan (BoJ) interest rate decision. Friday’s US inflation report showed that prices remain stubbornly high and core inflation, which excludes volatile food and energy, picked up in August from the previous month. Hotter US inflation data released last week bolstered expectations that the Fed would raise interest rates. The US central bank is widely expected to lift its short-term interest…
The Dow Jones Industrial Average trades just under 52,000, down around 450 points, a day before the Fed’s first expected hike since July 2023. Bets in the futures market put the odds of a quarter-point at 92.5%, so Wednesday’s vote is not the news. The rate that moved is the yield on the 10-year Treasury, the price the government pays to borrow for a decade. It touched 5.04% on Tuesday, its highest since 2007, and it is the rate the Dow’s companies and their customers borrow at. The Fed sets the other one.A third of a point from the market,…
Kolkata: A net $33.5 billion accumulation of overseas deposits from the Indian diaspora helped the country’s capital account log a massive surplus In July, also leading to positive balance of payments offsetting the current account deficit for the month, data published by the Reserve Bank of India showed.The capital account in July stood at a surplus of $27.7 billion. For the first four months, it was also a surplus of $23.9 billion, reversing the first quarter deficit as the RBI’s dedicated dollar-mobilisation programme exceeded all expectations.The four months surplus widened as compared with $11.4 billion in in the year ago-period.The…
ING’s Francesco Pesole notes the Pound has been resilient against the Dollar and EUR/GBP has fallen about 0.5% since Friday, partly on positioning ahead of the Bank of England meeting. Source