USDINR
On Thursday, USDINR is very much likely to commence session with new all time higher levels at 80.05 – 80.15 levels as dollar surged to a fresh two-decade high against major peers and stocks fell after the Federal Reserve raised U.S. interest rates and forecast more hikes ahead than investors had expected.
USDINR TECHNICAL
Day Trend: - BUY ON DIP
Weekly Trend: - HOLD
INTRADAY RANGE – 80.38 (80.14 – 79.90) 79.66
THE FED GAME
The Fed raised rates sharply, by 75 basis points, on Wednesday - the third such rise in a row. That takes the bank's benchmark overnight rate target range to 3-3.25%.
Projections showed officials think rates are going higher and growth is going lower and the median forecast is for the funds rate to hit 4.4% this year - higher than markets had priced and 100 bps more than the Fed projected three months ago.
THE YIELDS
The two-year yield rose as high as 4.1230% and was last at 4.0848%, while the 10-year yield fell 6 bps to 3.5120%.
INTEREST RATE HIKE AHEAD
Central bank meetings in Taiwan, Japan, the Philippines, Indonesia Britain and Norway are due later in the day with hikes expected everywhere but Japan.
THE HONG KONG CENTRAL BANK
On Thursday, The Hong Kong Monetary Authority raised its base rate charged through the overnight discount window by 75 basis points to 3.5%, hours after the U.S. Federal Reserve delivered a rate hike of the same margin.
BRAZIL CENTRAL BANK
On Wednesday, Brazil’s central bank chose to keep interest rates unchanged, pausing an aggressive monetary tightening cycle even as U.S. and European policymakers are still racing to catch up with inflation.
The central bank forecast for inflation this year fell to 5.8%, from 6.8% last month, still far above the 3.5% target, with a tolerance margin of 1.5 percentage points on either side.
WELCOME TO CENTRAL BANK DRIVEN MARKET
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