- The Indian Rupee remains relatively calm ahead of the FOMC meeting.
- The decline in US Treasury yields and the decline in oil prices boost the Indian Rupee on Tuesday.
- The decision of the Federal Open Market Committee (FOMC) on interest rates will be closely followed by traders.
The Indian Rupee (INR) is trading flat on Tuesday against the US Dollar (USD) amid multiple challenges. A pullback in US Treasury yields and falling oil prices lift the INR on the day. However, capital outflows could put pressure on the INR as foreign investors sold $1.67 billion worth of Indian stocks in October. Furthermore, issues arising from geopolitical tensions in the Middle East could boost safe-haven assets like the Dollar and act as a tailwind for the USD/INR pair.
On Tuesday, investors will be watching India’s fiscal deficit and infrastructure output data for September. This week, attention will turn to the Federal Open Market Committee’s (FOMC) expected interest rate decision on Wednesday. Markets expect the central bank to leave interest rates unchanged at its November meeting.
Daily Market Drivers Summary: Indian Rupee remains sensitive to geopolitical factors and risk sentiment.
- Markets will watch whether the Reserve Bank of India starts selling bonds through open market operations this week as liquidity improves.
- India’s foreign exchange reserves decreased by $2.36 billion to $583.53 billion in the week ending October 20, according to the Reserve Bank of India.
- The Dallas Fed manufacturing index fell to -19.2 in October, down from a drop to -18.1 in September.
- The US core personal consumption expenditure (PCE) index stood at 3.7% year-on-year in September, up from 3.8% in the previous reading, matching market expectations; The overall PCE stood at 3.4% year-on-year versus the estimate of 3.4%.
- Michigan’s consumer confidence index improved to 63.8, better than expected.
- The University of Michigan’s one-year inflation expectations are expected to grow by 4.2%, while for a five-year period they are expected to remain stable at 3.0%.
- Foreign investors sold $1.67 billion worth of Indian stocks in October, which could weigh on the Indian rupee.
- The Reserve Bank of India will continue to monitor maintaining inflation at the 4% target.
- The RBI forecast that Indian GDP would grow at an annual rate of 6.5% in the current fiscal year.
- In October, the International Monetary Fund (IMF) revised upwards its growth rate forecast for India to 6.3%.
- India’s wholesale price index for September, a gauge of inflation, fell -0.26% year-on-year from 0.52% previously, below the market consensus of 0.50%.
Technical Analysis: Indian Rupee is trading flat with a slight negative bias
The Indian Rupee remains flat against the US Dollar on the day. The USD/INR pair remains within a range of 83.00-83.35. The bullish outlook for USD/INR remains intact as the pair remains above the 100-day and 200-day EMA on the daily chart.
If there is decisive buying above the upper limit of the range of 83.35, a recovery to the yearly highs of 83.45 will occur. Higher up, the next bullish barrier is at the psychological level of 84.00. On the opposite side, the key support level lies at 83.00, which represents the confluence of the October 20 low and a round level. A break below that level could cause a drop to 82.82 (low Sep 12), on the way to 82.65 (low Aug 4).
Dollar Quote in the last 7 days
The following table shows the percentage change of the United States Dollar (USD) against the major currencies in the last 7 days.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.69% | 0.85% | 1.12% | -0.16% | 0.32% | 0.40% | 1.26% | |
| EUR | -0.69% | 0.16% | 0.43% | -0.86% | -0.38% | -0.30% | 0.56% | |
| GBP | -0.85% | -0.17% | 0.27% | -1.03% | -0.54% | -0.47% | 0.40% | |
| CAD | -1.13% | -0.44% | -0.27% | -1.30% | -0.82% | -0.73% | 0.12% | |
| AUD | 0.18% | 0.87% | 1.03% | 1.29% | 0.49% | 0.57% | 1.43% | |
| JPY | -0.32% | 0.38% | 0.54% | 0.80% | -0.50% | 0.07% | 0.93% | |
| NZD | -0.39% | 0.31% | 0.46% | 0.73% | -0.56% | -0.09% | 0.85% | |
| CHF | -1.25% | -0.55% | -0.39% | -0.11% | -1.42% | -0.93% | -0.85% |
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.
