- The Indian rupee advances in the Asian session on Friday.
- A weaker US dollar and the fall in oil prices support the INR.
- The March IPP of the United States and the advanced data of Michigan’s consumer’s feeling will be the points highlighted later on Friday.
Indian rupee (INR) is strengthened on Friday. The decision of the president of the United States, Donald Trump, to temporarily reduce tariffs to many countries provides some support to the local currency. In addition, the fall in crude oil prices contributes to the increase in INR, since India is the third largest oil consumer in the world, and the lowest prices of crude oil tend to have a positive impact on the value of the Indian currency.
However, the reduction of the feature bets of the Federal Reserve (FED) could strengthen the US dollar (USD). Investors anticipate that the US Central Bank will resume interest rate cuts in June and will probably reduce its policy rate at a complete percentage point by the end of the year.
Data on industrial production and manufacturing production of India will be published later on Friday. On the US Agenda, the March Price Price (IPP) Price Index (IPP) will be published and the feeling of the Michigan Advanced consumer. In addition, Alberto Musalem and John Williams of the Fed are scheduled to speak.
Indian rupee is recovered in the midst of a weaker US dollar
- The Monetary Policy Committee (MPC) of the Bank of the Reserve of India (RBI) voted unanimously to reduce the policy rest rate by 25 basic points (PBS) to 6.00% at its April meeting on Wednesday.
- The president of the USA, Donald Trump, maintained a 10% general tariff over all imports announced last week and established a 90 -day break in additional US tariffs during which the White House will negotiate the highest tariffs.
- The US consumer price index (CPI) decreased to 2.4% year -on -year in March from 2.8% in February, according to the US Labor Statistics Office (BLS) on Thursday. This reading was below the market consensus of 2.6%.
- The underlying IPC, which excludes volatile food and energy prices, increased a 2.8% year -on -year in March compared to the previous 3.1% and was below the 3.0% estimate. In monthly terms, the general CPI decreased by 0.1%, while the underlying CPC increased by 0.1%.
- The president of the Boston Fed, Susan Collins, said Thursday that the high commercial tariffs pursued by the Trump administration will almost surely boost upward inflation and depress short -term growth. Collins sees a stable monetary policy amid uncertainty.
- The president of the Chicago Fed, Austen Goolsbee, highlighted the high levels of uncertainty amid very aggressive commercial tariffs and advocated a waiting approach and see in monetary policy. Goolsbee added that if the economy gets back again, rates cuts would still be possible.
USD/INR maintains a bullish bias, consolidation is probable in the short term
The Indian rupee quotes the firmer in the day. The USD/INR torque trend remains intact, with the price above the 100 -day exponential (EMA) mobile average. However, the 14 -day relative force (RSI) index remains close to the midline. This suggests that greater short -term consolidation cannot be ruled out.
The first upward barrier for the USD/INR arises at 86.61, the maximum of April 10. Extended gains could see a rebound towards the psychological level of 87.00. A decisive rupture above the mentioned level could pave the way to 87.53, the maximum of February 28.
In the bearish case, the key support level for the torque is in the area of 86.00-85.90, representing the 100-day Ema and a round number. The next level of containment to observe is 85.48, the minimum of March 24, followed by 85.00.
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.
