- Indian Rupee strengthens in Asian session on Friday.
- A positive trend in Indian equities supports the INR, while higher crude oil prices could limit its upside.
- India’s quarterly GDP for the first quarter and US PCE inflation data will be in focus on Friday.
The Indian Rupee (INR) is up on Friday despite a strong US Dollar. India’s increased weight in the MSCI Emerging Markets Index could lead to significant foreign investment, stabilising the INR in the near term. However, a recovery in crude oil prices could limit the local currency’s upside as India is the world’s third-largest importer and consumer of oil.
India’s quarterly GDP for the first quarter of fiscal year 2024-25 (FY25) will be released on Friday, and is estimated to grow by 6.9% year-on-year in the first quarter. On the US agenda, Personal Consumption Expenditure (PCE) inflation data will be in focus as it could offer some clues on whether the Fed will implement a 25 or 50 basis points (bps) rate cut at the upcoming meeting in September.
Daily Market Wrap: Indian Rupee influenced by capital flows in domestic equities and global factors
- The increase in the weight of Indian stocks in the MSCI emerging markets index, effective Friday, is expected to attract up to $3 billion in inflows, according to Nuvama Alternative and Quantitative Research.
- The annualized US gross domestic product (GDP) growth for the second quarter (Q2) was revised up to 3.0% from 2.8% in the initial estimate, better than the 2.8% estimate, the Bureau of Economic Analysis (BEA) said on Thursday.
- The number of Americans filing new claims for unemployment benefits for the week ending August 24 decreased to 231K from 233K in the previous week. This figure was below the consensus of 232K.
- Atlanta Fed President Raphael Bostic said Thursday that there is still a long way to go on inflation, adding that the Fed should wait for more employment and inflation data before cutting rates.
- According to the CME’s FedWatch tool, rate futures markets now price in a nearly 66% chance of a 25 basis point (bp) rate cut in September, but the odds of a deeper rate cut stand at 34%, down from 36.5% ahead of the US GDP data.
Technical Analysis: The overall trend of the USD/INR remains constructive
The Indian Rupee is trading stronger on the day. The USD/INR pair faced a rejection from the 84.00 barrier on Wednesday, but the bullish outlook remains intact as the pair is above the 100-day exponential moving average (EMA) on the daily time frame. However, further consolidation cannot be ruled out in the near term as the 14-day Relative Strength Index (RSI) is hovering around the midline, indicating neutral momentum for the USD/INR.
The ascending trend line and the psychological level of 84.00 seem to be a difficult hurdle for the pair to overcome. A sustained bullish momentum will see a rally to the all-time high of 84.24 en route towards 84.50.
On the other hand, the first downside target is located near the August 20 low at 83.77. Any further selling will see a drop to the 100-day EMA at 83.61.
US Dollar Price Today
The table below shows the percentage change of the US Dollar (USD) against the major currencies listed today. The US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.04% | 0.00% | -0.02% | -0.09% | -0.12% | -0.06% | 0.04% | |
| EUR | -0.04% | -0.04% | -0.07% | -0.13% | -0.16% | -0.10% | -0.01% | |
| GBP | 0.00% | 0.04% | -0.05% | -0.10% | -0.12% | -0.08% | 0.04% | |
| CAD | 0.02% | 0.07% | 0.04% | -0.06% | -0.10% | -0.02% | 0.07% | |
| AUD | 0.09% | 0.13% | 0.09% | 0.06% | -0.03% | 0.02% | 0.12% | |
| JPY | 0.12% | 0.16% | 0.13% | 0.08% | 0.03% | 0.05% | 0.15% | |
| NZD | 0.05% | 0.11% | 0.06% | 0.02% | -0.03% | -0.06% | 0.10% | |
| CHF | -0.04% | 0.00% | -0.04% | -0.08% | -0.14% | -0.16% | -0.10% |
The heatmap shows the percentage changes of the major currencies relative to each other. The base currency is chosen from the left column, while the quote currency is chosen from the top row. For example, if you choose the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change shown in the chart 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.
