This week the Indian Rupee touch a historic low (60.80) as fears that the US Federal Reserve could start its QE tapering program sooner rather than later. Positive fundamental indicators like a narrower deficit and advances in the energy reform from brought the currency out of the low point. The currency finished the trading week at 59.67 after an impressive two day recovery.
The INR received outside help as what seemed to be genuine fears of a short term tapering by the Fed continued to be dismissed as more Fed members have questioned the move. In the short term it will be unlikely, although it is not discounted further down the year. September is the earliest most analyst see a change in US monetary policy, with some observers going further until the end of the year.
The Reserve Bank of India released the narrower deficit numbers early to stop the decline of the Rupee. It had the desired effect as it one of the main factors investors acted upon. Natural gas prices were doubled in an effort to tie prices to international benchmarks. The markets took the solid data and active reform as Rupee positives, although there are still question marks in the horizon as the currency will finish the quarter on a negative 8% relative to last.
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- Chris Bowen New Australia’s Treasurer
- Chinese Central Bank Pledges to Avoid a Credit Crunch
- AUD Volatility Near 2 Year High on China Credit Crunch Fears
- Gold Correlation with Stocks Turns Negative
- Singapore and Malaysia Economy Growth May be Shaved if Haze Continues
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- BIS Criticizes Central Bank Whatever it Takes Rhetoric
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- USD/INR Rebounds on Narrower Current Deficit and US Tapering Fears Subsiding
- USD/INR Drops to All time Low on US Economic Outlook
- China Rates Falling Most Since ’08 on PBOC intervention
- PBOC may need to adjust monetary policy after last week’s scare
WEEK AHEAD
* CNY Manufacturing PMI
* EUR Euro-Zone Consumer Price Index Estimate
* USD ISM Manufacturing
* AUD Reserve Bank of Australia Rate Decision
* GBP Bank of England Rate Decision
* GBP BOE Asset Purchase Target
* EUR European Central Bank Rate Decision
* USD Change in Non-farm Payrolls
* USD Unemployment Rate
* CAD Net Change in Employment
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View the original article: http://forexblog.oanda.com/20130628/week-in-fx-asia-indian-rupee-recovers-after-slump-boosted-by-reforms/
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