- Indian rupee gains strength in Wednesday’s Asian session.
- The weakest US dollar and lower crude oil prices continue to support the INR.
- The US USA sales report and the speech of the president of the FED, Powell, will be the points highlighted later on Wednesday.
Indian rupee (INR) quotes in positive territory for the fifth consecutive day on Wednesday. The weakening of the US dollar (USD) and the prolonged fall of crude oil prices have relieved the losses of the Indian currency. It is worth noting that 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.
On the other hand, US president Donald Trump said on Monday that he was considering temporary exemptions to tariffs on vehicles and imported parts to allow cars manufacturers more time to establish manufacturing operations in the US in the US, however, the tensions between the US and China are increasing, which could weigh on the Asian coins, including the INR.
Looking ahead, investors will be attentive to retail sales of the US of March later on Wednesday, which is expected to increase 1.3% intermensual in March. In addition, the speech of the president of the Federal Reserve (FED), Jerome Powell, will be at the Center for Care.
Indian rupee advances to a weakest American dollar
- The Bank of the India Reserve (RBI) will buy bonds for a value of 400 billion rupees (4.67 billion $) and will also carry out a 43 -day repo for 1.50 billion rupees on Thursday, according to Reuters.
- India’s Consumer Price Index (CPI) increased by 3.34% year -on -year in March, compared to 3.61% in February, according to the Ministry of Statistics and Programs Implementation. This reading was softer than the 3.60% expected.
- The governor of the Fed, Christopher Waller, said on Monday that Trump administration tariff policies were a great shock for the US economy that could take the central bank to cut rates to avoid a recession, even if inflation remained high.
- The president of the Atlanta Fed Bank, Raphael Bostic, said that the uncertainty about tariff policies and others of the Trump administration has put the economy in a “great pause”, and suggested that the Bank of the Fed should be kept waiting until there is more clarity.
- The markets are now valuing almost 85 basic points (PBS) of relief of monetary policy by the end of the year, with most waiting for the Fed to keep the rates next month, according to the Fedwatch tool of the CME.
USD/INR resumes your downward road below the 100 -day Ema
Indian rupee is stronger in the day. The USD/INR pair resumes its descent as the pair crosses below the average exponential (EMA) medium key of 100 days in the daily time frame. The downward impulse is supported by the 14 -day relative force (RSI) index, which is below the midline about 42.60, indicating that the long -term bassist trend has not yet ended completely.
The initial support level for the USD/INR is located at 85.48, the minimum of March 24. Further south, the next level of containment to observe is 85.20, the minimum of April 3, followed by 84.95, the minimum of April 3.
In the upward case, the area of 85.90-86.00 acts as an immediate level of resistance for the torque, representing the EMA of 100 days and the psychological level. The bullish candles and constant trade above the mentioned level could see a rebound around 86.61, the maximum of April 10.
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.
