INR forecast: INR opens weaker at 70.64 as against yesterdays close of 70.49 and may trade the day between 70.45-70.80 under two way price action.
Today RBI will conclude it two way monetary policy meeting at 2.30 pm. While no rate hike is highly being expected on back of lower inflation(Refer graph below) and softer GDP data. Market would be keen to knowing RBI take on future inflation forecast. The current low level of inflation would become the base for inflation in next year.
Going ahead, we foresee trade deficit to see fall (possibly visible in reading of Dec or Jan). The soft trade deficit with benign inflation could keep INR weakness under check. We foresee the range to be 69 to 71.50
From overseas market, USD trade stronger after Trump latest tweets re- escalated the fear that trade war is not yet over. Safe heaven JPY too surged higher post to the tweet.