Forex trading tips: Dollar supported vs. yen, euro on rate hike hopes

The dollar was supported against the yen and the euro on Friday, as demand for the greenback remained broadly supported by growing expectations for a December rate hike by the Federal Reserve.

USD/JPY  was steady at 122.90, not very far from Wednesday's three-month high of 123.69.

BUY GBPINR ABOVE ABOVE 101.13 TGS 101.23-101.33-101.43 STOPLOSS 100.93

The US Dollar Index which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.17% at 99.25, re-approaching Wednesday's seven-month high of 99.96.

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FOREX TRADING TIPS IN INDIA: Trade limited but trade profitable.

The dollar eased against the other major currencies on Wednesday, but remained close to seven month highs hit in the previous session on heightened expectations for a rate increase by the Federal Reserve next month.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.15% to 99.56, holding just below Tuesday’s highs of 99.84, the strongest since April 13.

Demand for the dollar continued to be underpinned by expectations that the Fed will hike rates before the years end.

Data on Tuesday showing that U.S. inflation rose in October . U.S. inflation rises 0.2% in October; core prices up 0.2%

FOREX CALL : BUY GBPINR ABOVE ABOVE 101.10 TGS 101.20-101.30-101.40 STOPLOSS 100.90 

WATCH OUR DAILY FOREX SIGNALS: FOREX TARDING TIPS IN INDIA

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Investors will have to deal with high volatility, without any major index returns in the coming months. 

The impending US Fed rate hike, possible currency devaluation by China, shale oil crisis, Russian aggression and the Middle East conflict are the global factors to contend with. 

Clearly, given the backdrop of global events, foreign liquidity flows would always be in question in the medium term. Back home, similar to Bihar, Government will have an uphill task in Assam, West Bengal and Tamil Nadu in 2016.

 However, at no cost should we ignore the macroeconomic tailwinds. Reducing current account deficit and fiscal deficit will have a resounding effect on the market.

 And if majority of analysts around the world are to be believed, then commodity prices are likely to remain subdued, which should continue to help an importing nation like India.

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FOREX-Dollar edges down from highs as investors take profits

The dollar edged away from a 6-1/2-month high against the euro on Monday, as investors took profits on the greenback's surge after bumper U.S. jobs data bolstered bets on the U.S. Federal Reserve raising interest rates in December.

The only major currency against which the dollar climbed further on Monday was the yen, which hit a 2-1/2-month low of 123.495 JPY= , down 0.3 percent on the day.

The euro fell sharply on Friday to $1.07045 EUR= , its weakest since mid-April. That took the single currency's falls to almost 6 percent in the two weeks since the European Central Bank indicated that it would expand its asset-purchase programme and could further cut its deposit rate.

But on Monday, the single currency recovered around a third of a percent to $1.0774.

FOREX CALL : BUY GBPINR ABOVE ABOVE 100.36 TGS 100.46-100.56-100.66 STOPLOSS 100.16

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Dollar hovers near 3-month high, US jobs awaited for rate clues

The dollar held firm on Friday with investors on tenterhooks over whether upcoming U.S. jobs data will be strong enough to cement rising expectations of a Federal Reserve interest rate hike next month.

The dollar index treated water at 97.927, keeping in close reach of a three-month high of 98.135 struck on Thursday.

"Fed policymakers appear to be trying to keep the possibility of a December rate hike alive since their last policy meeting," said Shinichiro Kadota, chief Japan forex strategist at Barclays.

Fed Chair Janet Yellen said on Wednesday that "liftoff" in interest rates in December was a live possibility, leading investors to think a rate hike will come next month unless economic indicators drastically weaken in coming weeks.

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