- Indian rupee can be seen against the US dollar before commercial conversations between the US and China.
- US NFP data slightly better than projected supported the US dollar on Friday.
- The RBI anticipated interest rate cuts to accelerate economic growth.
The Indian rupee rises against the US dollar (USD) to about 85.70 during the Asian session on Monday. The pair yields as the US dollar begins in a weak tone, with investors focused on commercial negotiations between the United States (USA) and China in London later in the day. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, corrects about 99.00 after a decent upward movement on Friday.
During the weekend, US president, Donald Trump, confirmed in a publication in Truth.Social that his main negotiators will meet with Chinese representatives in London on June 9 to extend the discussions on the bilateral agreement.
“I am pleased to announce that Treasury Secretary Besent, the Secretary of Commerce Lutnick and the US trade representative, Ambassador Greer, will meet in London on Monday, June 9, 2025, with representatives of China, in relation to the trade agreement. The meeting should go very well,” Trump wrote.
Meanwhile, Beijing has also confirmed that the Vice Prime Chinese Minister He Lifeng will meet with US commercial delegates during his visit from June 8 to 13 in London, according to the Chinese Ministry of Foreign Affairs (MOFA). “The first meeting of the economic and commercial consultation mechanism between China and the US will take place with the US during this visit,” the agency said.
The scenario of a positive result of commercial negotiations between the US and China will be favorable for the US dollar and US assets. Both were beaten during the commercial war between the two nations, which followed the announcement of reciprocal tariffs by President Trump in the so -called “Day of Liberation”, which is April 2.
What moves the market today: Indian rupee attracts some offers at the beginning of the week
- Indian rupee strives to extend Friday’s upward movement against its main peers at the beginning of the week. The Indian currency won strongly on Friday after the Indian Reserve Bank (RBI) announced a Pro-Recipient monetary policy.
- Technically, an unexpected advertisement of ultra moderate monetary policy often drives sales in the local currency. However, Indian rupee wins as the RBI indicated little margin for more interest rate cuts. The Central Bank changed its posture of “accommodation” to “neutral”, citing that there is a “limited margin” to further reduce the repurchase rate.
- The RBI anticipated interest rate cuts by unexpectedly reducing its repurchase rate by 50 basic points (PBS) to 5.5%. Economists had anticipated a regular reduction of 25 bs. The Central Bank also reduced its cash reserve ratio (CRR) in 100 PBS, a movement that would allow the banking system to increase its loan disbursement limit by 2.5 LAKH Crore of RS, which should be kept in liquid form.
- The governor of the RBI, Sanjay Malhotra, declared that a higher rates cut than usual was necessary, citing the need to boost economic growth. “It was necessary to anticipate rates cuts to support growth,” said Malhotra.
- This week, the main trigger for Indian rupee will be the consumer price index (CPI) for May, which will be published on Thursday. In April, the IPC data was 3.16% year -on -year. In the RBI policy announcement, the Central Bank reviewed the inflation guide for fiscal year 26 to 3.7% from the 4.0% projected above.
- On Friday, the US dollar won strongly after the Non -Agricultural Payroll (NFP) report showed that labor growth was slightly better than projected. The US economy added 139K new workers, more than 130K estimates. The unemployment rate remained stable at 4.2% and the average income per hour constantly grew by 3.9% year -on -year.
- However, although official employment data exceeded estimates by a small margin, market experts believe there is an underlying weakness in the labor market. Macquarie analysts said that their advanced indicators suggest that some cracks have begun to appear in the labor market. To support their statement, analysts pointed out that the unemployment rate remained stable while the participation rate contracted.
- After US NFP data, President Trump again criticized the Federal Reserve (Fed) for not reducing interest rates. “Too late in the Fed is a disaster! Europe has had 10 rates cuts, we have not had any. Despite it, our country is doing very well. They go for a complete point, rocket fuel! Trump wrote in Truth Social.
Technical analysis: USD/INR is maintained above the 20 -day EMA
The Indian rupee shows about 85.70 against the US dollar in its Monday opening session. However, the short -term trend of the torque is bullish since it remains above the 20 -day exponential (EMA) mobile average.
The 14 -day relative force index (RSI) ranges around 60.00. A new bullish impulse will take action if the RSI breaks above that level.
Looking up, the pair could visit a maximum of more than 11 weeks around 86.70 after breaking above the maximum of May 22, 86.10. Downward, the minimum of June 3, 85.30 is a key support level for the principal. A break down below this could expose it to a minimum of May 26, 84.78.
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.
