USD extends gains after hawkish FOMC minutes
USD traded higher amid worries about widespread coronavirus infections and as fears grow that the Fed will start tapering bond purchases just as covid cases are on the rise and starting to hamper the global economic recovery. The Federal Reserve meeting minutes show that the central bank is considering reducing pandemic-era stimulus this year.
The minutes of the Fed's July meeting showed officials largely expect to reduce their monthly bond-buying later this year, but consensus on other key issues appeared elusive, including the timing of the start of the taper and whether inflation, joblessness, or the coronavirus pandemic pose a bigger risk to economic recovery.
Data from the US Commerce Department showed that retail sales dropped by 1.1% in July following an upwardly revised 0.7% increase in June. The weak data comes after a report released last week by the University of Michigan which showed that consumer confidence plunged to the lowest level in almost a decade.
INR falls after RBI minutes show continued support to economy
INR came under pressure in risk off-trades. Concerns over rising covid cases across Asia are weighing on demand for risker currencies.
The minutes from the latest Reserve Bank of India’s monetary policy meeting revealed that the RBI considers that India needs continued monetary support for the economy. The focus should remain
on the revival of growth.
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