The American currency traded lower by 0.68 percent yesterday as markets book profits from post election rally. Moreover, the prospects of interest rate hike in Dec’16 FOMC meeting has already been priced out.
There has been some mixed release of economic datasets from the nation which has kept the markets contemplating about US Federal reserve’s rate hike move in Dec’16. Hiring in government and private sector picked up in Nov’16 and the unemployment rate tumbled to a nine – year low while wages unexpectedly declined thereby providing a mixed picture of progress in the labor market.
GDP, consumer confidence and manufacturing PMI came better than the forecasted levels. However, last week’s weak unemployment claims and pending home sales data dented the market sentiments. All the above factors kept the DX weak which made an intraday low of 99.849 and closed at 100.090 levels on Monday.
Indian Rupee is expected to trade sideways to lower as higher DX will keep the INR pressurized. Moreover, markets will indulge in speculation prior to the RBI Monetary Policy meeting that is to be held tomorrow. Markets believe that the RBI govern or might cut repo rate cut by 25 basis points; all thanks to low inflation rate.