INR forecast: INR opens flat 68.55 as against yesterday’s close of 68.54 and now at 6851. The range for the day likely to be difficult as RBI is to announce it’s monetary policy review later in the day at 2.30 pm. Owing to which INR may turn volatile. For now, range looks to be 68.35 to 68.70.
While market participant has been anticipating status quo this time and expecting rate hike on Oct’18 meeting. RBI in its last meeting of Jun’18 had hike lending rate by 25 bps or 6.25% indicating rise in inflationary pressure in coming months. The latest numbers of CPI stands at multi month high at 5% which may force RBI to reconsider it’s options.
Also tonight at 11.30 pm U.S central bank Fed will conclude it’s review current economy where no major changes is expected. However tone of Fed chair will add momentum to market.
This morning CNY is weaker at 6.829 after news spread that U.S president Trump plans to impose tariff on USD 200 bn imports of Chinese goods. The reports from US suggests that companies are announcing price increase to offset tariffs increase of metals and electronic imports from China. How consumers voice react to rise in end good pricing would also decide future course of action by Trump.