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USD/INR continues to trade in narrow range ahead of key inflation data from India. The RBI changed its stance to "accommodative" from "neutral" last week and cut interest rates for the third time in a row, bringing the borrowing rate to a nine-year low of 5.75%.
Markets expect that the U.S. Fed might move towards a dovish stance considering the slowdown in the economy. Weak data from US pointed towards weakening of the economy and further pressurized FED to trim the rates.
Odds of a rate cut at next week’s meeting are around 18%, while at the next meeting in July, it is more than 80%, according to the CME Fed Watch Tool.
USDINR is expected to trade Higher in today’s session.
U.S. President Donald Trump accused Europe of devaluing the euro zone's single currency in a series of tweets on Tuesday that also targeted U.S. monetary policy with renewed attacks on the U.S. central bank.
"The Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage," Trump tweeted without offering any evidence. The trade war also had its impact on Yuan which in turn supported the Euro. Worsening of trade situation might further support Euro.
EURINR is expected to trade sideways in today’s session.
May stepped down as leader of the ruling Conservative Party on Friday, having failed three times to win parliament's support for a European Union divorce deal that was supposed to steer the country smoothly out of the bloc and deal with Britain's biggest political crisis in a generation.
Boris Johnson remains the odds-on favourite to be Britain's next PM. Nine other Tory MPs are vying to succeed May: first round of voting Thursday. Second to fourth rounds next week, before top two run-offs. GBP could rise if Johnson fails to make run-off. Finally, EU won't renegotiate the Brexit deal - UK politics in turmoil.
Increasing fears of no Brexit deal amid rising political uncertainties might continue to limit the gains.
GBPINR is expected to trade sideways in today’s session.
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