- Indian rupee quotes on negative terrain in the Asian session on Tuesday.
- The optimism for commercial conversations between the US and China signs the US dollar and drags the inr.
- The operators prepare for the reports of the IPC of India and the US, which will be published later on Tuesday.
The Indian rupee (INR) weakens on Tuesday, pressured by the firmness of the US dollar. Positive indications of commercial conversations between the United States and China raise the US dollar (USD) and weigh on the Indian currency. In addition, an intensification of the conflict between India and Pakistan could exert some sale pressure on the local currency.
However, foreign portfolio investors (FPI) have resumed the purchase of Indian shares, which could provide some support to the INR. Looking ahead, investors will be attentive to the Indian Consumer Price Index (CPI) for April, which will be published later on Tuesday. On the US Agenda, the IPC inflation report is also expected. The general CPI is expected to show an increase of 2.4% year -on -year in April, while the underlying IPC is projected to show an increase of 2.8% year -on -year in the same period of the report.
Indian rupee loses land in the midst of the progress of the commercial agreement between the US and China
- India Prime Minister Narendra Modi declared on Monday that India will not tolerate any “nuclear blackmail.” Modi added that operations against Pakistan have only been leisurely, and the future will depend on their behavior.
- The high fire remained intact in Jammu and Kashmir and in the border cities during the night, after the forceful message of the PM modi to the terrorists and Pakistan.
- The president of the USA, Donald Trump, agreed to reduce additional tariffs on Chinese imports in April of this year from 145% to 30%, and Chinese tariffs on US imports will be reduced from 125% to 10%. The new measures are effective for 90 days.
- Swaps markets have discounted the first reduction of rates of 25 basic points (PBS) of the Fed for the September meeting, and expect two additional reductions towards the end of the year. Last week, they indicated three cuts this year, with a probable change as soon as in July.
USD/INR keeps the bass vibra below the 100 -day key em.
Indian rupee gives in the day. The bass perspective of the USD/INR pair prevails since the price remains limited below the exponential (EMA) 100 -day mobile average in the daily chart. The downward impulse is supported by the 14 -day relative force (RSI) index, which is below the midline about 44.15, suggesting that more falls seem favorable.
The first downward objective for the USD/INR arises at 84.53, the minimum of May 8. Red candles below this level could see a fall at 84.12, the minimum of May 5. The next level of containment to monitor is 83.76, the minimum of May 2.
On the other hand, the psychological level of 85.00 acts as the immediate resistance level for the torque. A sustained trade above the mentioned level could see a rebound at 85.60, the 100 -day EMA, en route to 86.00, the upper limit of the trend channel and a round number.
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.
