- Indian rupee weakens before the economic figures of India that will be published on Monday.
- Petroleum prices can lose ground in the midst of growing concerns about excess supply.
- The US dollar can have difficulties since operators expect the FED to cut interest rates in September.
The Indian rupee (INR) loses ground against the US dollar (USD) on Monday after registering profits in the two previous sessions. The USD/INR torque is probably appreciated because the highest prices of crude oil exert down pressure on the INR. It is important to note that India is one of the world’s greatest crude oil importers. Operators expect a series of economic figures from India on Monday, including industrial production, manufacturing production and commercial deficit.
The price of oil West Texas Intermediate (WTI) is quoted around $ 64,70 per barrel at the time of writing this article. However, the potential for crude oil prices could be limited in the midst of the decrease in fears on supply interruptions, driven by the high fire in the Middle East. In addition, Opec+, the organization of oil exporting countries and its allies, is ready to increase production by 411,000 barrels per day in August, after a similar increase already planned for July.
Indian rupee gained ground due to strong entries of foreign capital. Foreign institutional investors (FIIS) bought Indian shares worth 8,915 million rupees so far in June. Analysts point out that this renewed interest reflects the confidence in the history of economic growth of India and the underlying strength of the market.
What moves the market today: Indian rupee maintains losses in the middle of a stable US dollar
- The dollar index (DXY), which measures the value of the US dollar compared to six main currencies, is listed up to 97.20 at the time of writing this item. The US employment figures are scheduled to be published later in the week, which could offer a new impulse to the US Federal Reserve Perspective (Fed).
- The US Non -Agricultural Payroll report is expected to show that the economy added 110,000 new jobs in June, below 135,000 in May. The estimated range is currently between a maximum of 140,000 and a minimum of 75,000. In addition, it is anticipated that unemployment increases to 4.3% from 4.2%.
- The US dollar can have difficulties in the middle of the growing expectations that the Federal Reserve (FED) cut interest rates at the September meeting. The data showed on Friday that personal spending in the US fell unexpectedly in May, the second fall of this year. Meanwhile, personal income in the US fell 0.4% in May, the highest decrease since September 2021.
- The president of the USA, Donald Trump, could announce a successor for the president of the Federal Reserve (Fed), Jerome Powell, for September or October. Trump could consider the former governor of the Fed, Kevin Warsh, and the director of the National Economic Council, Kevin Hassett, according to the Wall Street Journal.
- Chicago Fed president Austan Goolsbee said Thursday that political waves are not a factor in decision -making, nor would the appointment of a shadow president, according to CNBC.
- The president of the Fed, Jerome Powell, said Wednesday that Trump’s tariff policies can cause temporary price increase, but could also lead to more persistent inflation. The Fed must be cautious when considering additional rate cuts.
- Economists have projected a slightly slower Gross Domestic Product (GDP) in India for the current fiscal year that ends in March, in 6.4%, compared to the 6.5% growth seen last year, according to a Reuters survey. Economists have projected slower growth despite the fact that the Bank of the Indian Reserve (RBI) has anticipated interest rate cuts.
Technical analysis: USD/INR maintains profits around 85.50
The USD/INR torque maintains modest profits about 85.50 on Monday, falling below the nine -day exponential (EMA) mobile average, which suggests a weaker short -term prices impulse.
The 14 -day relative force (RSI) index is maintained below the 50 mark, indicating a persistent bearish bias.
Downward, the monthly minimum at 85.30 appears as immediate support. Meanwhile, the nine -day EMA at 85.81 could act as the main barrier.
USD/INR: Daily graphic
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.
