The Indian rupee opens flat is set to come under mild pressure at Wednesday's open with investors focused on whether the central bank will deliver its first rate hike in more than three years and how it plans to manage surplus banking system liquidity. All eyes will be on the Reserve Bank of India at 10:00 a.m. local time on Wednesday. A Reuters poll showed 35 of 61 economists expect the RBI to raise its repo rate by 25 basis points on Wednesday, while 26 expect no change. Swap markets indicate ?a 25-basis-point hike is fully priced and are leaving some room for a larger 50-basis-point move. The US dollar remained lower on Wednesday after stress in European bond markets abated and as eyes turned to the release of Federal Reserve minutes and speeches by its policymakers for signals on a potential rate hike. The euro surged by the most in seven weeks in the prior session as French bond yields slid after the frontrunner in next spring's presidential election outlined plans to slash spending. The yen weakened even after a dovish Bank of Japan board member said she would support interest rate increases. The dollar index , which measures the greenback against a basket of currencies, rose 0.03% to 101.94, following a 0.27% slide in the prior session. The euro eased 0.08% to $1.1249. The Japanese yen weakened 0.19% against the greenback to 158.43 per dollar. Sterling dipped 0.08% to $1.3262. Yesterday, the US equity market touched record highs supported by optimism over earnings outlook and some stabilization in global bond yields. The stabilization in yields was helped by a moderation in crude oil prices. The US 3-year Treasury auction yesterday for USD 58 bn also drew stable demand, with bid-to-cover ratio at 2.62. . Today, the focus shifts to the FOMC minutes from the September policy meeting, which should offer further clarity on the Fed's rate trajectory. Brent crude oil traded below USD 100 pb as rising Middle Eastern crude exports and a G-7 emergency stockpile release eased supply concerns. However, Brent crude oil inched higher during the Asian trade today to trade at USD 101.53 pb on reports of further escalation in tensions in the Middle East. Gold prices slipped on Wednesday as investors looked to minutes from the US Federal Reserve's September meeting for indications on whether policymakers remain inclined to raise rates further. Spot gold eased 0.3% to $4,150.23 per ounce by 0145 GMT. US gold futures edged 0.2% lower to $4,177.60. Spot silver fell roughly 1% to $61.12, platinum rose 0.2% to $1,704.25, while palladium lost ?0.3% to $1,168.20.
www.eforexindia.com......
More