- Indian rupee weakens in Wednesday’s Asian session.
- An increase in the demand of the US dollar at the end of the month and the highest prices of crude oil weigh on the INR.
- Positive trends in the national stock market and new foreign investments could limit the rise in the torque.
Indian rupee (INR) loses impulse on Wednesday. The demand of the US dollar (USD) at the end of the month by local oil companies and importers, along with the recovery of the dollar against the main currencies, undermines the Indian currency. In addition, extended profits in crude oil prices could weigh on the INR, since India is the third largest oil consumer in the world.
On the other hand, the increase in Indian stock markets, with foreign institutional investors (FIIS) back in purchase mode, elevates the local currency. The MBA mortgages of the US MBA and the requests for lasting goods will be published later on Wednesday. In addition, it was programmed that Federal Reserve officials (FED) speak, including Neel Kashkari and Alberto Musalem.
Indian rupee against USD drops slightly in the middle of a firm demand from the US dollar
- “There was a demand at the end of the month, particularly from the oil companies, and probably demands dollars from the bank of the reserve to close their short open positions that expire in March,” said Anil Bhansali, head of Treasury Treasury of Finrex Treasury Advisors.
- The president of the USA, Donald Trump, said in Wednesday that he is ready to implement tariffs on copper imports in a few weeks, according to Bloomberg.
- The US Consumer Trust Index has fallen for a fourth consecutive month to a minimum of 12 years, going down to 92.9 in March, according to the Board Conference on Tuesday. This figure was lower than the estimate of 94.5.
- The sales of new housing in the US increased 1.8% at a seasonally adjusted annual rate of 676,000 units in February, the Census of the Department of Commerce revealed on Tuesday. The January sales rhythm was reviewed at a rate of 664,000 units from the 657,000 units reported above.
The bassist perspective of the USD/INR is maintained under the 100 -day Ema
Indian rupee weakens in the day. The USD/INR torque maintains the bassist vibrate, characterized by the price that is maintained below the exponential mobile (EMA) average of 100 days in the daily temporal frame. However, the 14 -day relative force (RSI) index moves below the 30.00 mark, indicating overall conditions and justifying some caution. This suggests that greater consolidation or temporary recovery are on the horizon.
The minimum of January 6 at 85.60 acts as an initial support level for the USD/INR. The sustained bearish pressure could drag to the lowest torque up to 84.84, the minimum of December 19, 2024. More to the south, the additional filter to be monitored is 84.22, the minimum of November 25, 2024.
On the positive side, the psychological level and the 100-day EMA in the area of 85.95-86.00 seem to be a difficult obstacle to overcome for the bullies. A decisive rupture above this level could set its gaze on the next upwards at 86.48, the minimum of February 21, en route around 87.00, the round figure.
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.
