Rupee is likely to trade lower: 19.09.2016

Rupee is likely to trade lower: 19.09.2016

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 Rupee is likely to trade lower as markets indulge in speculation ahead of central bank meetings in the US and Japan this week.

 Robust release of inflation rate from the US has increased the chances of a rate hike which will keep the DX strong.



US DOLLAR INDEX (USD) In spite of the recent dovish comments by Boston Fed President  Eric Rosengren and Fed Governor Lael Brainard, US Dollar Index  traded higher by 0.8 percent in the last week.  Reason behind this sudden upswing could be attributed to the  robust release of inflation data from the nation on 16 th Sep’16.  Due to sharp rise in healthcare cost, consumer prices rose more  than expected levels in Aug’16.

 Markets believe that this steady  build - up of inflation could allow the Federal Reserve to raise  interest rates sooner - than - later in 2016. Due to all the above factors, there a demand boost for US Dollar  which made a weekly high of 96.12 and ended at 96.11 levels on  Friday. OUTLOOK Rupee is likely to trade lower as markets indulge in speculation  ahead of central bank meetings in the US and Japan this week.  Robust release of inflation rate from the US has increased  the  chances of a rate hike which will keep the DX strong. This in turn  will keep the INR pressurized.