The USD/INR reaches a maximum of three weeks while the US dollar is negotiated firmly

• Indian rupee weakens against the US dollar while operators reduce moderate bets of the Fed.
• The delay in the confirmation of the commercial agreement between the US and India has kept the Indian rupee in embers.
• The US retail sales data for June exceeded estimates, increasing 0.6%.

The Indian rupee (INR) records a new minimum of three weeks against the US dollar (USD) on Friday. The USD/INR pair jumps at about 86.35, while the US dollar maintains profits near its immediate maximums.

At the time of writing, The dollar index (DXY), which tracks the value of the dollar against six main currencies, clings to profits about a maximum of more than three weeks around 99.00.

The US dollar is firmly negotiated since operators have reduced bets that support interest rate cuts by the Federal Reserve (FED) at the September meeting, after signals of increasing inflationary pressures of the June Consumer Price Index (IPC).

According to the CME Fedwatch tool, the probability that the FED cuts interest rates at the September meeting has been reduced to 58% since 70.4% seen a week ago. The tool also shows that the Fed is almost safe to maintain stable interest rates in the range of 4.25% -4.50% at the policy meeting later this month.

The US CPI report showed on Wednesday that the prices of products that are mainly imported to the economy have increased after the adjustment of sectoral tariffs.

Contrary to market expectations, he Governor of the Fed, Christopher Waller, continues to argue in favor of reducing interest rates in the July policy meeting, citing downward risks for the economy and the labor market. “The Fed should cut interest rates at 25 basic points at the July meeting, since the growing risks for the economy and employment favor a more flexible rate policy,” Waller said. He added that the Fed should not wait until “the labor market in front of problems before cutting rates.”

Another reason behind the fortress of the US dollar are the optimistic June retail sales data, at a time when market experts anticipated that higher tariffs would have affected household spending power. The Census Office reported Thursday that retail sales, a key measure of consumer spending, increased at a faster rate of 0.6% in the month, compared to 0.1% estimates. In May, the measure of consumer spending decreased 0.9%.

What moves the market today: Indian rupee declines against the US dollar

• Indian rupees collapses against the US dollar to around 86.20, while investors expect the confirmation of a commercial agreement between the US and India. The president of the United States, Donald Trump, has expressed confidence on several occasions that Washington is very close to reaching a commercial pact with New Delhi.
• However, the delay in the confirmation of a bilateral agreement by the economies has kept Indian companies in tension. Indian companies that export an important part of their production to the US have been reluctant to move forward with their investment plans amid uncertainty about the possible tariff rate.
• In the so -called “Liberation Day” on April 2, the president of the USA, Trump, imposed 26% tariffs on India imports, which were later suspended for 90 days to allow Indian delegates to reach an agreement.
• The impact of the suspense of the trade agreement is also visible on Indian stock markets, which have shown slow performance during the last two months. NIFTY50 has negotiated in a range of almost 5% since May 12, which had a strong increase of more than 13% since April 7. On Friday, the cost of 50 shares opens with a 0.2%drop, striving to maintain the psychological level of 25,000.
• Until now, the US has closed agreements with the United Kingdom (United Kingdom), Vietnam and Indonesia, and a limited pact with China. The economy has announced reciprocal tariffs at 22 nations, notably Japan, the European Union (EU), Canada, Mexico and South Korea, which are its main commercial partners, since they failed to close an agreement during the 90 -day tariff pause period.

Technical Analysis: USD/INR jumps about 86.35

USD/INR advances about 86.35 on Friday, the highest level seen in three weeks. The pair is strengthened after attracting offers near the 20 -day exponential (EMA) mobile average, which is negotiated around 86.00.

The 14 -day relative force (RSI) index is close to 60.00. A new bullish impulse would be triggered 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 minimum of June 24 at 86.42 will be a critical obstacle to the pair.