- USD/INR has slipped to near 82.68 as USD Index has extended its correction.
- Investors are anticipating a less-hawkish monetary policy stance from the Fed after scrutiny of February’s US economic data.
- Oil price is struggling to extend its recovery above $68.00 as fears of a banking sector meltdown would result in lower advances.
The USD/INR pair has shifted its auction below the critical support of 82.80 in the Asian session. The asset is expected to remain on the tenterhooks as investors are anticipating a less-hawkish monetary policy stance from the Federal Reserve (Fed) after scrutiny of United States economic data (Feb). The major has slipped to near 82.68 and it seems that more losses are in pipeline ahead.
S&P500 futures have eased some of the gains generated in the early Asian session as the risk-aversion theme has not entirely faded. The 500-US stocks basket futures are likely to remain volatile as fears of the global banking crisis have stretched after the debacle of Credit Suisse. Although the Swiss National Bank (SNB) has promised to provide liquidity support to the investment banking firm, fears of global financial instability cannot be ruled out.
Considering the statement from Credit Suisse chairman Axel Lehmann that state assistance “isn’t a topic” for the bank as it seeks to recover from a string of scandals that have undermined the confidence of investors and clients, Bloomberg reported, the downfall of Credit Suisse is not expected to heal sooner.
The US Dollar Index (DXY) has extended its correction to near 104.50 amid soaring uncertainty over the interest rate decision by the Federal Reserve (Fed), which will be announced on March 22. The rally in the USD Index, witnessed on Wednesday, was backed by fears of global banking turmoil. And now investors are expected to discount the less-hawkish pitch to be delivered by Fed chair Jerome Powell over interest rates next week.
In order to restore the confidence of households and investors, the Fed might keep the borrowing rates steady or go for a 25 basis point (bps) rate hike to continue weighing pressure on the United States inflation.
Meanwhile, oil price is struggling to extend its recovery above $68.00 as fears of a banking sector meltdown would result in the lower release of advances. This might scale down the oil price further. It is worth noting that India is one of the leading importers of oil in the world and lower oil prices would trim India’s fiscal deficit.