Indian Rupee: Fed Meeting In Focus

24 Jan 2022 , 09:11 AM

The Indian rupee is expected to begin the week on a sceptical note on Monday, 24 January 2022 with all focus towards the crucial Fed meeting due for the week. However, rebounding crude oil prices and dollar struggling to recover tracking firmer yields amid mixed concerns over the covid variant Omicron and geopolitical fears surrounding Russias invasion of Ukraine is also likely to reroute rupee direction through the day.

On Friday, rupee recovered by 8 paise to close at 74.43 against the US dollar over its last close of 74.51. During the week, the local currency has depreciated 28 paise against the US dollar.

Meanwhile, build up to the upcoming budget session would be the key event that the market would be looking for in the near future. The Budget session of Parliament is set to commence on January 31 and will conclude on April 8. The government will present the Budget for fiscal 2022-23 on February 1. The Economic Survey is likely to be tabled on January 31 after the presidents address, as per reports.

Domestic equity benchmarks ended with deep losses on Friday, sliding for the fourth straight session. The barometer index, the S&P BSE Sensex, tumbled 427.44 points or 0.72% to 59,037.18. The Nifty 50 index fell 139.85 points or 0.79% to 17,617.15. Foreign portfolio investors (FPIs) sold shares worth Rs 3,148.58 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 269.36 crore in the Indian equity market on 21 January, provisional data showed.

Overseas, Asian stocks traded lower on Monday as investors looked ahead to the U.S. Federal Reserves monetary policy meeting this week. The Federal Open Market Committee is due to meet on Tuesday and Wednesday to decide on the next steps for U.S. monetary policy. Wall Streets main indexes ended sharply lower on Friday as Netflix shares plunged after a weak earnings report.

In global currencies, US Dollar Index (DXY) seesaws around 95.70 as it awaits crucial week comprising Fed meeting amid early hours of Mondays Asian session. Meanwhile, US 10-year Treasury yields rose 2.7 basis points (bps) to 1.774%, snapping a three-day decline.

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