US DOLLAR INDEX (USD)
The US Dollar Index traded lower by more than 1 percent in the last week. Reason behind the weakness could be attributed to the disappointing release of economic datasets from the nation along with the rising fears of US Presidential Elections. Both ADP and Non-Farm Employment change came on a weaker note. NonManufacturing PMI plunged to 54.8 levels from 57.1 in Oct’16. Factory Orders and Prelim Unit Labor Costs declined by 0.3 percent in Oct’16.
Moreover, the prospect of a December’16 rate hike indication from the Federal Reserve in Nov’16 policy meet went unnoticed; all thanks to the upcoming US Presidential Elections. News that the FBI planned to reopen investigations into Hillary Clinton email debacle kept the markets in jitters as world markets expected a Clinton victory at the polls next week.
INDIAN RUPEE (USDINR) The Indian Rupee depreciated by 0.08 percent in the last week owing to persistent buying of the greenback by importers and banks. Sensex and Nifty ended in red tracking losses in Asian, American and European markets as investors remain cautious ahead of the US Presidential Elections. Sentiment remained downbeat due to sustained selling by foreign funds and retail investors on the domestic bourses which affected the INR. For the month of November 2016, FII outflows in equities totaled at Rs. 1504.42 crores ($225.07 million) as on 4 th November’16. Year to date basis, net capital inflows stood at Rs. 45482.30 crores ($6835.26 million) as on 4 th November’16. Indian Rupee made a weekly low of 66.79 and closed at 66.79 levels on Friday.
STERLING POUND (GBPUSD) Sterling pound traded higher by 2 percent in the last week as markets discounted the release of BOE monetary policy. The policymakers kept the bank rate at 0.25 percent and expect impact of Sterling on inflation to be temporary and offsetting it fully with higher rates would be too costly. The committee also said that weaker Sterling reflected market view that UK's future trade with EU may be less open than expected.
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