Dollar slips, Rupee weakens, all eyes on fiscal stimulus

Source :Sify
Author :Finance Desk
Last Updated: Thu, Oct 15th, 2020, 14:06:35hrs
US Dollar

The US Dollar index weakened in trade on Wednesday evening with traders cautiously observing for cues on fresh stimulus announcement.

On Thursday morning, a slight weakness was spotted in the Indian Rupee however it settled at Rs 73.29 in the morning trade.

The weakness in the Dollar stems from a "notion" that a new stimulus could be coming soon, but "delay is hinting that it may roll out only after the US elections," according to Rahul Gupta, Head of Research for Currency at Emkay Global Financial Services.

He added, "Also, the halt in covid-19 vaccine trials calibrates that the race for a vaccine is bumpy and we cannot hope for a quick global economic recovery."

Speaking on USDINR spot, he said, "it is trading sideways in between 73-73.60 and we may see it to continue being in this range."

In International markets, The dollar index that measures the greenback against six major peers was reportedly down 0.16 percent at 93.3865. In late trading session, the Euro was up to $1.1750 from $1.1744 in the previous session, and the British pound was up to $1.3023 from $1.2933 in the previous session. The Australian dollar increased to $0.7166 from $0.7153.

The US dollar bought 105.10 Japanese yen, lower than 105.49 Japanese yen of the previous session. The US dollar decreased to 0.9131 Swiss franc from 0.9145 Swiss franc, and it was up to 1.3145 Canadian dollars from 1.3140 Canadian dollars.

Recent market moves have oscillated with the probability of substantial additional fiscal stimulus. An impasse among US lawmakers in Washington somewhat dimmed hopes that more Covid-19 relief aid would come to fruition before the election.

"It's likely that markets will remain sensitive to news of fiscal support in the lead-up to the election," analysts at UBS said in a note on Wednesday.