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News Update:Indian markets, INR and other currencies are trading cautiously ahead of Fed meeting (FOMC) which is scheduled to held on Wednesday i.e. tomorrow. US Fed is expected to turn off its quantitative easing program (QE) and will wait for some time before increasing interest rates. Data on Monday showed U.S. services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased, providing more evidence that the Fed has reason to wait before raising U.S. interest rates. QE is a program initiated by US Fed in order to inject liquidity into the US economy. US Fed buys bonds from banks and lend them billions of dollars every month at very low rates. It was started in 2008 by the then Republican Government of US. Fed used to lend 85 Billion Dollars per month to banks which now have come down to 15 Billion Dollars. Too much of Dollars in the system will make its value go down and INR and other currencies will gain on that. However, increasing rates in US will make the dollar expensive which will reduce its supply, thus making it valuable and INR will lose.

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