Daily Digest Market Movers: Indian Rupee consolidates amid rising speculation of RBI interventions

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  • According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has slightly decreased to 31.0%, down from 38.0% a week ago.
  • The first US presidential debate between former President Donald Trump and Democratic nominee Kamala Harris in Pennsylvania began with a critical focus on the economy, inflation, and economic policies. Trump remarked, "We have a terrible economy. We have inflation that is probably the worst in history. This has been a disaster for people."
  • On Tuesday, Reuters reported that six Indian bankers indicated that investors are urging the Indian federal government to increase the issuance of short-term and green bonds and to restart auctions for floating-rate bonds. These recommendations were discussed during a series of meetings about the government’s borrowing strategy for the latter half of the fiscal year.
  • Chicago Fed President Austan Goolsbee remarked on Friday that Fed officials are starting to align with the broader market's sentiment that a policy rate adjustment by the US central bank is imminent, according to CNBC. FXStreet’s FedTracker, which uses a custom AI model to evaluate Fed officials' speeches on a dovish-to-hawkish scale from 0 to 10, rated Goolsbee's comments as dovish, assigning them a score of 3.2.
  • India's FX Reserves reached a record high of $683.99 billion as of August 30, up from $681.69 billion previously. This surge is largely due to a substantial influx of foreign exchange into the Indian economy, spurred by robust economic growth and the long-anticipated inclusion of Indian assets in JPMorgan's major emerging market debt index, which has enhanced foreign investment.


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