- Indian rupee loses traction in Thursday’s Asian session.
- The weakening of the Chinese yuan and the increase in crude oil prices weigh on the INR.
- Initial applications for Une.UU weekly unemployment subsidy and housing data will be published later on Thursday.
The Indian rupee (INR) loses ground on Thursday, breaking a five -day streak. A weakening of the Chinese yuan in the middle of the escalation of the commercial war exerts pressure on most Asian currencies, including the Indian currency. A recovery in crude oil prices contributes to the fall of the INR, since India is the third largest oil consumer in the world.
However, optimism around Indian actions could provide some support to the local currency. Indian reference rates have recovered all losses caused by Trump’s reciprocal tariffs earlier this month. It is considered that the great domestic economy of the country can support a possible better recession better than many pairs, which face higher tariffs. Looking forward, investors expect the construction permits of the US, the beginnings of housing, the manufacturing index of the Fed of Philadelphia and the initial applications of weekly unemployment subsidy, which will be published later on Thursday. The Indian market will be closed on Good Friday.
Indian rupee slips down in the midst of augmented commercial tensions
- “Yuan is an anchor currency for Asian markets,” said Sakshi Gupta, main economist at HDFC Bank. “The RBI can be comfortable with a certain degree of depreciation if our pairs are also being depreciated, from a competitiveness perspective.”
- The president of the Federal Reserve (Fed), Jerome Powell, said on Wednesday that commercial tensions are at risk of undermining the Employment and Inflation objectives of the Fed. Powell added that US economic growth seems to be slowing down, with a modest growth of consumer spending, and an avalanche of imports to avoid tariff feeling is deteriorating.
- US retail sales increased 1.4% in March, followed by the 0.2% increase observed in February, according to the US Census Office on Wednesday. This figure was better than the 1.3%estimate.
- Financial markets expect the Fed to resume fees in June and that by the end of the year the policy rate, currently in the range of 4.25%-4.50%, is a lower percentage point.
The bassist bias of the USD/INR prevails below the 100 -day EMA
Indian rupee quotes in negative territory in the day. The negative vision of the USD/INR torque remains intact, with the price staying below the average exponential (EMA) medium key of 100 days in the daily temporal framework. The lower resistance path is down, since the 14 -day relative force (RSI) index is below the midline about 41.60.
The first downward target to observe is 85.51, the minimum of April 16. Any additional sale below this level could see a drop at 85.20, the minimum of April 3, followed by 84.95, the minimum of April 4.
On the other hand, the area of 85.90-86.00 seems to be a hard obstacle to the bulls, representing the 100-day Ema and the psychological level. A sustained trade above the mentioned level could pave the way to 86.61, the maximum of April 10.
India Faqs Rupia
Indian rupee (INR) is one of the most sensitive currencies to external factors. The price of crude oil (the country depends largely on imported oil), the value of the US dollar (most of the trade is carried out in US dollars) and the level of foreign investment are all influential factors. The direct intervention of the Bank of the Reserve of India (RBI) in the currency markets to keep the exchange rate stable, as well as the level of the interest rates set by the RBI, are other important factors that influence the rupee.
The Bank of the Reserve of India (RBI) actively intervenes in the currency markets to maintain a stable exchange rate and help facilitate trade. In addition, the RBI tries to maintain the inflation rate in its 4% target adjusting interest rates. Higher interest rates often strengthen rupee. This is due to the role of the “Carry Trade”, in which investors borrow in countries with lower interest rates to place their money in countries that offer relatively higher interest rates and benefit from difference.
Macroeconomic factors that influence the value of rupee include inflation, interest rates, economic growth rate (GDP), trade balance and foreign investment tickets. A higher growth rate can lead to greater investment abroad, increasing the demand for rupee. A less negative trade balance will eventually lead to a stronger rupee. The highest interest rates, especially real types (less inflation interest rates) are also positive for rupee. A risk environment can generate higher direct and indirect foreign investment entries (FI and FII), which also benefit the rupee.
Higher inflation, particularly if it is comparatively higher than other countries, is generally negative for the currency, since it reflects a devaluation through excess supply. Inflation also increases the cost of exports, which leads to more rupees to buy foreign imports, which is negative for Indian rupee. At the same time, higher inflation usually leads to the Bank of the Reserve of India (RBI) to raise interest rates and this can be positive for rupee, due to the increase in demand for international investors. The opposite effect applies to lower inflation.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
