Stocks trade higher, RBI interest rate decision ahead

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The Reserve Bank of India will announce its interest rate decision later Friday.

Of the 63 respondents to a Reuters poll, 26 expect an increase of 50 basis points to 5.4%, while 20 predict a rise of 35 basis points.

“We think optimal policy anchoring will require at least another 50 basis points increase,” Vishnu Varathan, chief economics and strategy officer at Mizuho Bank, wrote in a note Friday. He pointed to underlying inflation risks and a sharp Fed.

“Overall, it is in the RBI’s interest to preload 50 bps than to spare 15 bps-25 bps, but waste the macro stability derived from the May/June gains,” he said.

In the US, the Dow Jones Industrial Average lost 85.68 points, or 0.26%, to 32,726.82 overnight. The S&P 500 was roughly flat at 4,151.94 at the close. The Nasdaq Composite gained 0.41% to 12,720.58 points.

Friday’s jobs report is expected to show 258,000 jobs added in the US last month, according to estimates by Dow Jones economist. That’s less than the 372,000 added in June.

Currencies and Oil

The US dollar index, which tracks the greenback against a basket of its peers, last stood at 105,858 after falling from around 106.5 recently.

The Japanese yen changed hands at 133.26 per dollar. The Australian dollar stood at $0.6966 after falling sharply from above $0.7 on Tuesday.

US West Texas Intermediate crude was fractionally higher at $88.62 a barrel, after losing 2.3% in the previous session.

Brent oil futures gained 0.16% to $94.27 a barrel after finishing Thursday’s session 2.75% lower at $94.12 a barrel. Both benchmarks hit their lowest level in months.

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