Ahead of Indian Interim Budget 2019 USDINR opened at par 71.10/11 levels. We are expecting that budget will be populist as market expected that hurt rupee sentiment on fiscal front against greenback. it is interesting to see how government manage to fiscal deficit boundary. Mr. Modi is facing growing discontent over depressed farm incomes and doubts over whether his policies are creating enough jobs. A local media report on Thursday quoted a government survey as saying the jobless rate was the highest in at least 45 years, putting further pressure on the government.
INTRADAY RANGE - 70.56 ( 70.90 - 71.24 ) 71.62
On Thursday , Indian rupee edged higher by 4 pips to 71.08 against the US dollar amid weakness in the greenback in overseas markets after the US Fed kept interest rate unchanged. Also, a massive rally in domestic equities lifted trading sentiment in forex market. After opening on a firm note at 70.92, the rupee climbed further to a high of 70.86 following dollar selling by exporters, before finally closing at 71.08, up 4 pips.
Dollar/yen is expected to remain weak given a dovish Federal Reserve but we can expect a bigger move down if there is a return of risk-off sentiment. There is still a lot to worry about outside the US with growth in Europe and China slowing. Trade talks between the United States and China could also have an impact on the dollar, which has acted as a safe-haven in times of uncertainty.
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