27 Nov 2022

USD extends losses as Fed minutes signal slower rate hikes

USD traded under pressure last week following the dovish FOMC minutes released on Wednesday. The market is growing increasingly confident that the Federal Reserve will slow the pace of rate hikes in the December meeting to 50 bps driving UST yields down.

author dp
Team INRBonds
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  • USD traded under pressure last week following the dovish FOMC minutes released on Wednesday.
  • The market is growing increasingly confident that the Federal Reserve will slow the pace of rate hikes in the December meeting to 50 bps driving UST yields down.
  • The Federal Reserve's November meeting minutes showed that most policymakers at the central bank agreed that it would soon be appropriate to slow the pace of interest rate hikes.
  • INR remained flat as inflation expectations cool
  • According to India’s finance ministry, India’s inflation is expected to cool in the coming months as commodity prices start to fall.
  • India’s annual retail inflation has remained stubbornly above the central bank’s upper tolerance limit of 2% to 6% since the start of the year. Most recently, inflation has eased to 6.77% in October.
  • The Finance Ministry also said that the global slowdown could impact India’s exports.

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