- The Indian Rupee loses ground on the Diwali Balipratipada holiday.
- India’s inflation eased in October, moving closer to the 4% target set by the central bank.
- US Consumer Price Index (CPI) and India Wholesale Price Index (WPI) data will be the highlights this week.
The Indian Rupee (INR) moves lower on Tuesday as traders avoid taking large positions on the occasion of the Diwali Balipratipada holiday. Inflation in India slowed in October for the third consecutive month, moving closer to the medium-term target of 4% set by the central bank. However, the country is especially vulnerable to rising oil prices, as India is the world’s third largest consumer of crude oil.
Investors will closely monitor the US Consumer Price Index (CPI) data, which is due to be released on Tuesday. The headline CPI is expected to rise 0.1% MoM in October, while the core CPI is expected to rise 0.3% MoM and 4.1% YoY. Additionally, the year-on-year inflation of India’s wholesale price index will also be released. Volatility in the markets could trigger an intervention by the Reserve Bank of India (RBI) to protect the national currency.
Daily Market Summary: Indian Rupee Remains Sensitive to Global Factors and Uncertainty
- India’s Consumer Price Index (CPI) rose 4.87% year-on-year in October, up from 5.02% in September, above market expectations of 4.80%.
- The Reserve Bank of India (RBI) has kept interest rates unchanged for four consecutive meetings, while maintaining a relatively aggressive policy to ease price pressures.
- RBI Governor Shaktikanta Das stated that India remains vulnerable to food price shocks, and monetary policy continues to influence inflation towards the 4% target.
- The RBI estimates that Indian GDP will grow at an annual rate of 6.3% in the current fiscal year.
- Controlling food prices and inflation is one of the top priorities of Prime Minister Narendra Modi and his government as the election season approaches.
- The New York Fed’s survey of consumer expectations showed that the 1-year and 5-year inflation outlook softened to 3.57% and 2.72%, respectively.
- The US government reported a budget deficit of $66 billion in October, compared to a deficit of $87 billion in the same month last year.
- The University of Michigan Consumer Sentiment Index fell to 60.4 in November from 63.8 previously, below the market consensus of 63.7.
- The University of Michigan’s 12-month inflation expectations rose to 4.4% from 4.2%, while 5-year expectations rose to 3.2% from 3.0%.
- Fed Chairman Jerome Powell reiterated that the Fed will raise rates again if it deems necessary to control inflation.
Technical Analysis: Indian Rupee maintains bearish outlook unchanged
The Indian rupee is trading lower. The USD/INR pair has been trading in a known range of 83.00-83.35 since September. The upside potential for USD/INR remains intact as the pair remains above the key 100 and 200 day EMAs on the daily chart.
The first bullish barrier for the pair will emerge near the upper limit of the operating range of 83.35. If continuation buying occurs, it will pave the way towards the yearly high of 83.47. Further up, the next bullish stop to watch is the psychological round level at 84.00. On the other hand, 83.00 is a key support level. A decisive break below that level will see losses extend to the September 12 low at 82.82, followed by the August 4 low at 82.65.
Dollar Quote in the last 7 days
The following table shows the percentage change of the United States Dollar (USD) against major currencies in the last 7 days.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.22% | 0.57% | 0.86% | 1.86% | 1.13% | 1.51% | 0.31% | |
| EUR | -0.20% | 0.36% | 0.66% | 1.63% | 0.94% | 1.34% | 0.12% | |
| GBP | -0.57% | -0.37% | 0.29% | 1.29% | 0.57% | 0.98% | -0.25% | |
| CAD | -0.87% | -0.67% | -0.29% | 1.01% | 0.28% | 0.69% | -0.52% | |
| AUD | -1.89% | -1.68% | -1.31% | -1.01% | -0.73% | -0.32% | -1.56% | |
| JPY | -1.14% | -0.94% | -0.56% | -0.31% | 0.71% | 0.44% | -0.81% | |
| NZD | -1.57% | -1.36% | -0.98% | -0.69% | 0.32% | -0.41% | -1.23% | |
| CHF | -0.34% | -0.13% | 0.25% | 0.53% | 1.54% | 0.81% | 1.22% |
The heat map shows the percentage changes of the major currencies against each other. The base currency is chosen in the left column, while the quote currency is chosen in the top row. For example, if you choose the euro in the left column and scroll down the horizontal line to the Japanese yen, the percentage change in the box will represent EUR (base)/JPY (quote).
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.
