FIIs bought Rs. 10,339.80 crores worth of shares in the Indian stock market on Tuesday.
The Indian Rupee (INR) declines at open against the US Dollar (USD) on Wednesday. The USD/INR jumps to near 88.50, while the US Dollar trades slightly higher ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.
At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges up to near 98.80.
According to the CME FedWatch tool, traders have priced in a 25-basis-point (bps) interest rate reduction by the Fed that will push the Federal Fund rate to 3.75%-4.00%. Therefore, the major trigger for the US Dollar will be monetary policy guidance by the Fed for the last policy meeting of the year in December.
Market participants expect the Fed to deliver a dovish stance on the monetary policy outlook as the impact of US tariffs on inflation has not appeared to be persistent, labor market conditions continue to deteriorate, and the federal shutdown enters its fourth week.
The US Consumer Price Index (CPI) data for September showed on Friday that monthly headline and core inflation grew moderately by 0.3% and 0.2%, respectively. The same day, the flash S&P Global PMI report for October showed that while employment growth picked up, the pace of job creation remained only modest, and weakened especially in manufacturing. Job growth was limited by a worsening of business confidence, principally reflecting ongoing concerns over the impact of government policies such as tariffs.
USD/INR rises to near 88.50 at open on Wednesday. The pair strives to return above the 20-day Exponential Moving Average (EMA), which trades around 88.41.
The 14-day Relative Strength Index (RSI) recovers sharply from 40.00, suggesting buying interest at lower levels.
Looking down, the August 21 low of 87.07 will act as key support for the pair. On the upside, the all-time high of 89.12 will be a key barrier.
