Our systems have detected that you are using a computer with an IP address located in the USA.
If you are currently not located in the USA, please click “Continue” in order to access our Website.

Local restrictions - provision of cross-border services

Swissquote Bank Ltd (“Swissquote”) is a bank licensed in Switzerland under the supervision of the Swiss Financial Market Supervisory Authority (FINMA). Swissquote is not authorized as a bank or broker by any US authority (such as the CFTC or SEC) neither is it authorized to disseminate offering and solicitation materials for offshore sales of securities and investment services, to make financial promotion or conduct investment or banking activity in the USA whatsoever.

This website may however contain information about services and products that may be considered by US authorities as an invitation or inducement to engage in investment activity having an effect in the USA.

By clicking “Continue”, you confirm that you have read and understood this legal information and that you access the website on your own initiative and without any solicitation from Swissquote.

Research Market strategy
by Swissquote Analysts
Daily Market Brief

A pause in easing cycle doesn’t do bad for INR


A pause in easing cycle doesn’t do bad for INR

By Vincent Mivelaz

With geopolitical tensions rising amid the uncertain outcome of current Sino-American trade talks, EM currencies remain under constant pressure as China’s precondition to reach a phase one deal consisting of a rollback of US tariffs along with the US willingness to include topics such as intellectual property and technology transfer in the pact remain major sticking points. With fiscal policy apparently reaching its limits in India after Modi’s government already surpassed initial budget deficit in the first seven months of current fiscal year, the Reserve Bank of India decision to hold rates to mitigate price inflation surprises, particularly when considering continued downside risks on growth. Despite current rebound, we expect INR to decline as the 15 December 2019 deadline for tariffs worth $156 billion of Chinese products and a pending “unreliable entities list” from Beijing against US firms are still on the pipeline.

Fiscal stimulus in India’s economy appears subdued as the government already surpassed its fiscal deficit target, estimated at 102.40% or INR 7.2 trillion ($100 billion) while the RBI’s five interest rate cuts of its Repo Rate to current 5.15% (-1.10% year-to-date) has had a rather limited impact. Year-on-year economic growth lies at 4.50% (prior: 5%) in the third quarter, its lowest pace since March 2013, while the RBI’s growth forecast is now at 5% (prior: 6.10%) for the year ending March 2020, a rather negative view for Indian rupee as the RBI affirms that “there is space for further monetary policy action in the future”. Furthermore, with the US intensifying negotiations with its other trade partners and following first talks between Washington and New Delhi earlier in November that curiously concluded without a word on US dairy products, it seems that headlines are still to come on the matter.