- The FOMC minutes of the Federal Reserve’s July meeting released, indicate a willingness to start cutting asset purchases before the end of the year.
- The Eurozone consumer price index for July stood at 2.2% on an annual basis, reaching the flash estimate of 2.2%. Euro area GDP grew by 2% (tq) in Q2. On an annual basis, GDP rebounded 13.6%.
- India’s foreign exchange reserves declined by $ 2.10 billion to $ 619.37 billion for the week ended August 13 due to a decline in base currency assets and l ‘gold.
USDINR Weekly Performance and Outlook
- USDINR opened flat at 74.24 in a shortened week. The pair finally closed the week at 74.39 levels.
- The rupee fell slightly against the dollar as the greenback moved closer to its nine-month high after the minutes of the FOMC meeting in July suggested the US central bank may start cutting back on monthly purchases by the end of this year.
- Additionally, lockdowns due to increasing cases of the Delta variant of COVID-19 in several Asian countries have raised fears of a slower-than-expected economic recovery among investors. This led investors to turn to safe haven currencies, which weighed on emerging market assets, notably the Indian rupee.
- India Ratings and Research revised India’s GDP growth forecast for fiscal 22 to 9.4% year-on-year, saying the country’s economic recovery will depend on progress in its vaccination campaign.
- India’s WPI inflation fell to 11.16% in July from 12.07% a month ago as food inflation was eliminated and fuel inflation eased.
- The Federal Reserve’s efforts to reverse its easiness policy will be a dominant theme for markets over the coming week, as U.S. central bankers meet in Jackson Hole, Wyoming. USDINR is expected to trade with a neutral to bullish bias over the coming week and is expected to trade in a range of 74.00 to 75.00 over the coming week.
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