- Analytics
- News and Tools
- Market News
- USD/INR attracts some buyers amid firmer US Dollar, US Retail Sales eyed
USD/INR attracts some buyers amid firmer US Dollar, US Retail Sales eyed
- Indian Rupee drifts lower on the higher US Dollar and bond yields.
- The Reserve Bank of India’s Das said food inflation will be at the top of the central bank’s agenda.
- Investors await US Retail Sales ahead of the RBI’s Das speech at the World Economic Forum Annual Meeting 2024 on Thursday.
Indian Rupee (INR) trades on a softer note on Wednesday amid the extended rally of the US Dollar (USD). Nonetheless, traders place their bets that the INR will break out of its trading range and rally this year as India gains the confidence of foreign exchange investors who believe the Indian Rupee could trample the Greenback.
The Reserve Bank of India (RBI) Governor Shaktikanta Das said at the World Economic Forum (WEF) in Davos on Tuesday that food inflation can be volatile and will be on the top of the central bank’s agenda. WEF president Borge Brende stated that he sees India's growth story intact and running amid geopolitical tensions and a weak investment cycle.
Looking ahead, investors will keep an eye on US Retail Sales on Wednesday, which is estimated to show an increase of 0.4% MoM. On Thursday, the RBI governor Shaktikanta Das will share insights on key challenges and opportunities and his view on monetary policy at the World Economic Forum Annual Meeting 2024 at Davos.
Daily Digest Market Movers: Indian Rupee remains resilient amid geopolitical tensions
- The Reserve Bank of India (RBI) governor Shaktikanta Das said India's economic growth prospects remain robust and retail inflation is slowly moderating towards the 4% target.
- India’s December WPI inflation rose by 0.73% YoY from the previous reading of 0.26%, worse than the market expectation of 0.90%.
- India’s Wholesale Price Food Index arrived at 5.39% YoY in December.
- The Indian economy is predicted to grow by 8% this year, according to World Economic Forum (WEF) president Borge Brende.
- WEF’s Brende expects India will reach a $10 trillion economy, at least in the coming two decades.
- The US NY Empire State Index for January registered the lowest reading since 2020, coming in at -43.7 versus -14.5 prior, below the market consensus of -5.
- Fed Governor Christopher Waller said interest rate cuts are likely this year, but the central bank should not rush to cut its benchmark rate until it is clear lower inflation will be sustained.
Technical Analysis: Indian Rupee keeps the negative view intact in the short term
Indian Rupee trades weaker on the day. The USD/INR pair has maintained the 141.40-144.70 trading range since September 2023. The bearish mood prevails for USD/INR as the pair holds below the key 100-period Exponential Moving Average (EMA) on the daily chart. The short-term patterns lean somewhat negative, supported by the 14-day Relative Strength Index (RSI) which stands below the 50.0 midpoint.
The immediate resistance level for USD/INR will emerge at the upper boundary of the trading range at 83.40. A decisive break above 83.40 will see extended gains to a psychological round mark at 84.00. On the downside, the initial support level is seen at the 83.00 figure. The key contention level to watch is near the confluence of the lower limit of the trading range and a low of September 12 at 82.80. Any follow-through selling will see a drop to a low of August 11 at 82.60, followed by a low of August 24 at 82.40.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.11% | 0.16% | 0.06% | 0.31% | 0.08% | 0.14% | 0.10% | |
| EUR | -0.11% | 0.05% | -0.05% | 0.20% | -0.01% | 0.06% | -0.01% | |
| GBP | -0.16% | -0.05% | -0.11% | 0.15% | -0.06% | 0.00% | -0.06% | |
| CAD | -0.06% | 0.05% | 0.09% | 0.25% | 0.03% | 0.09% | 0.02% | |
| AUD | -0.31% | -0.20% | -0.15% | -0.25% | -0.22% | -0.15% | -0.21% | |
| JPY | -0.10% | 0.02% | 0.07% | -0.04% | 0.22% | 0.05% | 0.00% | |
| NZD | -0.14% | -0.05% | 0.00% | -0.10% | 0.15% | -0.07% | -0.06% | |
| CHF | -0.09% | 0.01% | 0.06% | -0.03% | 0.22% | 0.00% | 0.06% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Indian Rupee FAQs
What are the key factors driving the Indian Rupee?
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
How do the decisions of the Reserve Bank of India impact the Indian Rupee?
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
What macroeconomic factors influence the value of the Indian Rupee?
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
How does inflation impact the Indian Rupee?
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
