The USD/INR is strengthened in the middle of a constant flow of foreign funds

• Indian rupees collapse against the US dollar since the FIIS have sold a significant amount of Indian shares so far in July.
• Washington signed trade agreements with Japan and the Philippines.
• American officials are scheduled to visit India for the sixth round of commercial conversations in August.

The Indian rupee (INR) extends its loss streak for the fifth day of negotiation on Wednesday against the US dollar (USD). The USD/INR pair jumps about 86.60, the highest level seen in a month. The torque is strengthened even when the US dollar does not yield as its peers in the group of the seven (G7), which suggests a significant weakness in the Indian rupee.

At the time of writing, the American dollar index (DXY), which follows the value of the dollar against six main currencies, is negotiated at a weak level near the minimum of two weeks around 97.40 recorded on Tuesday.

The USD/INR pair remains optimistic as foreign institutional investors (FIIS) continue to reduce investments in Indian shares markets, which weighs on Indian rupee.

Until now this month, the FIIS have sold shares worth 22,185.90 million rupees. On Tuesday, the sales figure of the FIIS was 22,185.90 million rupees. The relentless sale by the FIIS in Indian shares is promoted by moderate growth in the quarterly profits of Indian companies and ambiguity on global commercial flow as the deadline of tariffs on August 1 in the United States is approaching.

Indian capitalization companies have registered moderate growth in the first quarter of the year. From the Petroleum and Telecommunications giant Reliance to the main banks of the private sector, companies have failed to impress investors. Meanwhile, the Eternal Food and Trade delivery platform (QC) has shown an impressive income growth in all its segments.

What moves the market today: Indian rupee updates its monthly minimum against the US dollar

• The US dollar quotes down against its peers even when the US has announced that it has added more bilateral agreements before the deadline of tariffs on August 1. The president of the USA, Donald Trump, announced through publications in Truth. Social on Tuesday that agreements with Japan and the Philippines have been signed.
• According to the agreement, Washington will receive tariffs of 15% and 19% on imports from Japan and the Philippines, respectively. The agreement with Japan has been signed at a time when the Japanese economy faces political risks, since Prime Minister Shigeru Ihiba has declared that it will resign at the end of August. This contrasts with his statement that he will continue to serve the country after losing control in the upper house of Parliament.
• President Trump said Tuesday that the agreement with Japan will open the door to Washington to trade in products that include cars and trucks, rice and certain other agricultural products.
• Meanwhile, the commercial agreement with India is not expected to end before the deadline of tariffs, since White House officials have declared that they will visit New Delhi for the sixth round of commercial negotiations. The impact of the delay on the commercial pact between the US and India would not be significant for Indian companies, since President Trump has not imposed tariffs on New Delhi.
• In the US, President Trump has again criticized the president of the Federal Reserve (Fed), Jerome Powell, for not lowering interest rates. “I think he has done a bad job, but he will leave soon. In eight months, he will leave,” Trump said in the White House on Tuesday.
• According to the CME Fedwatch tool, the probability that the FED reduces interest rates at the September policy meeting has also decreased to 58.7% from 69.6% seen a month ago. The operators reduce the Fed Dovish bets after the latest consumer price index (ICC) report showed that the prices of products that are the highest imports in the US have increased.
• Looking ahead, investors will focus on the preliminary data of the Indian-EE.UU PRIVATE PRI PMI) Index. For July, which is scheduled to be published on Thursday.

Technical analysis: USD/INR rises to about 86.60

The USD/INR jumps about 86.60 on Wednesday, the highest level seen in a month. The short -term trend of the torque remains bullish since the 20 -day exponential mobile average (EMA) is inclined to rise around 86.11.

The 14 -day relative force index (RSI) jumps to about 60.00. A new bullish impulse would arise if the RSI breaks above that level.

Looking down, the 50 -day EMA about 85.85 will act as a key support for the torque. On the positive side, the maximum of June 23 about 87.00 will be a critical obstacle to the pair.