There is a tremendous attack on the world’s largest currency. Where the dollar is terrified by the proposed rate cut of Fed. On the other hand, the trade talk between America and India has also weakened. Apart from this, American currency is also seen due to the strength of Japan and European currency. On Tuesday, the world’s largest currency dollar is visible at 72 days i.e. 10 weeks of lower level. According to experts, there can be further decline in the dollar.
According to estimates, if the Fed cuts 35 to 50 basis points, then the dollar level can go below 95. In such a situation, you can guess that in the coming days in the dollars, there can be a bigger decline. However, during the business session, the dollar appeared below the 97 level. At one time it seemed that the dollar level would break the lower level of 52 weeks. Fed meeting starts from Tuesday. On Wednesday, Fed Chairman will announce the Jerome Powell Policy. Let us also tell you what kind of dollar figures are being seen in the international currency market.
Dollar at 10 weeks lower level
The dollar index was shown at its lowest level after 7 July as compared to its major rivals on Tuesday. According to market watch data, the dollar index appeared at the level of 96.93. While around 7 pm, it appeared doing business at the level of 97.02. According to the factset data, the dollar fell down by 0.5 per cent in the dollar against the euro, yen and other major rivals. According to experts, the fed meeting is starting from Tuesday. On Wednesday, the Fed Chairman of the policy meeting can announce the cut in interest rates. By the way, the cut is estimated at 0.25 percent. At the same time, some experts say that the Fed can cut from 0.35 percent to 0.50 percent. In such a situation, there can be further decline in the dollar.
Cut by more than 10 percent
The special thing is that the dollar index has seen more than 10 percent reduction in the current year. If we look at the data, the dollar index has seen a decline of 10.59 percent in the current year. Surprisingly, the dollar index has come down by about 14 percent from its peak of the current year. In the last 5 business days, there is a decline of 0.81 percent in the dollar index. At the same time, in the last one year, there has been a decline of 4 percent in the dollar index.
At the same time, the dollar has come down by 2 percent in the last 3 months. Or the reason for the decline in the dollar of wealth management, the possible cuts from the Fed, the boom in the euro and yen and the start of trade talks between India and the US once again is getting a decline in American currency. In the coming days, the dollar can also go below the index 95 level.
Rupee increases for the second consecutive day
On the other hand, the rupee strengthened by eight paise to close at 88.08 per dollar against the US dollar on Tuesday as the US-India trade talks raised hopes of returning to track. The rupee has seen a boom for the second consecutive day. Foreign currency traders stated that the rupee strengthened due to positive domestic markets and weak dollars. The US dollar came to a two -month low before the upcoming meeting of the Federal Reserve and the disappointing economic figures.
The rupee opened at a price of 88.05 in the interbank foreign currency exchange market and touched a high level of 88.16 during trading and high levels of 88.01. At the end of the trading it closed at 88.08 per dollar (temporary), which is eight paise more than the previous closed price. On Monday, the rupee rose 10 paise to close at 88.16 against the US dollar. This means that in two days, the rupee has seen a rise of 18 paise against the dollar.
How can the rupee be next?
Mirae Asset Sharekhan’s Research Analyst (Currency and Commodity) Anuj Chaudhary said that due to the widespread weakness in the US dollar between the dismal economic figures from the US and the weak labor market, we believe that the rupee will remain strong. In the current situation, the expectations of cutting interest rates from the Federal Reserve have increased. Chaudhary said that the market is expecting a 0.25 percent reduction in interest rates and investors will monitor the speech of Federal Reserve Chairman Jerom Pavel for further guidelines.
He said that the soft trend of the Federal Reserve can bring the dollar even down, while an aggressive stance can strengthen the dollar. Chaudhary said that investors can be cautious before the decision of FOMC meeting this week. The spot price of dollars/rupees is expected to be between 87.75 and 88.30.