USD/INR, Fed rate hike not coming in this year??

#1
Hi Everyone,

I am an exporter and i trade in USD/INR.

i have hopes that Indian rupee will appreciate in coming time because of recent positive push by the government on rate cut and hawkish comments by Raghuram Rajan on Inflation outlook. In addition to this, higher than expected monetary easing in India and FII limit in government bonds can pull the bond market higher which will be positive for Indian rupee.

As seen in past one week, Indian rupee appreciated by 65 paise in 4 consecutive days and closed at 65.51.

However I am not able to understand the reasons why people are expecting Fed rate hike unlikely to come in 2015, when it is always made clear by Janet Yellen in her comments that fed will raise the rates sometime in this year.

Anyone who could tell me why it is unlikely for fed to raise interest rate and why did US equity market surged even after the negative nonfarm payroll data released on Friday which was quite lower than the expectations of 203k...


Genuine replies plezzzzz!:thumb:
 

Rish

Well-Known Member
#2
Hi Everyone,

I am an exporter and i trade in USD/INR.

i have hopes that Indian rupee will appreciate in coming time because of recent positive push by the government on rate cut and hawkish comments by Raghuram Rajan on Inflation outlook. In addition to this, higher than expected monetary easing in India and FII limit in government bonds can pull the bond market higher which will be positive for Indian rupee.

As seen in past one week, Indian rupee appreciated by 65 paise in 4 consecutive days and closed at 65.51.

However I am not able to understand the reasons why people are expecting Fed rate hike unlikely to come in 2015, when it is always made clear by Janet Yellen in her comments that fed will raise the rates sometime in this year.

Anyone who could tell me why it is unlikely for fed to raise interest rate and why did US equity market surged even after the negative nonfarm payroll data released on Friday which was quite lower than the expectations of 203k...


Genuine replies plezzzzz!:thumb:
When RBI surprise Rate Cut, shows that our Economy is also in trouble (unexpected and pushed by Finance Ministry). May be you are right..temp..Rupee may appreciate, but, rupee may depreciate in the coming months based on price cycle.

US Economy is in bad shape (price cycle confirms the downside cycle starts), FED is in tight spot, Any decision, market may get affected soon, based on price cycle. (we can't expect S&P fall 30% overnight, if may happen over the period of time)

US Market reacted for the nonfarm payroll data in the initial hour and bounced, because of price cycle.
 

natjay

Well-Known Member
#3
Honestly, the Fed have never been totally, unambiguously clear about anything. That's because they are a bunch of theorists spouting economic elitism.

If the Fed sticks to its set of idealized conditions for hiking rates then they'll keep waiting forever (at least 2-3 years). Inflation in the US is already low -- total opposite of India -- and jobs growth will continue to stay sluggish till the Presidential elections are done in late 2016.

If anything, the Fed should have hiked the rate in September itself and let "real" market forces take over. QE has kept things in artificial limbo for too long and created bubbles in certain sectors. As of now, uncertainty still remains and all cues point to either December 2015 or mid-2016
 

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