In the early European session on Monday, the Indian Rupee bounces back.
The INR is supported by stronger Indian GDP figures, but its upside may be limited by higher oil prices and RBI rate cut predictions.
Ahead of the RBI rate announcement later on Monday, traders anticipate the US May ISM Manufacturing PMI data.
The four-day losing skid is ended on Monday when the Indian Rupee (INR) bounces back. Through portfolio inflows and emotion, the positive India Q1 GDP report raises stocks and the value of the local rupee.
However, a spike in the price of crude oil could push the Indian rupee down. It is important to remember that India is the third-largest oil user in the world, and rising crude oil prices often devalue the Indian rupee. Furthermore, the INR's upside may be limited in the near future by the growing assumption that the Reserve Bank of India (RBI) will implement a third consecutive 25 basis point (bps) rate decrease to spur growth.
The US May ISM Manufacturing Purchasing Managers' Index (PMI) report, which is scheduled for release later on Monday, will be of interest to traders. The focus will be on the US Nonfarm Payrolls (NFP) statistics and the RBI interest rate announcement on Friday.
A trade deal between the US and India, which is formally anticipated to be finalized by fall, will also be eagerly watched by traders. A 90-day tariff moratorium on Indian imports expires on July 9 after US President Donald Trump imposed duties of up to 27% on them on April 2.
The positive India GDP data causes the Indian Rupee to increase.
The first quarter of 2025 saw India's GDP grow 7.4% YoY, up from 6.2% the quarter before and well above analyst forecasts of 6.7%.
Although growth has significantly slowed from the 9.2% peak seen in the fiscal year 2023–2024, India is still the largest economy with the quickest rate of growth in the world.
As increasing outbound foreign investment and repatriation by Indian businesses countered the inbound investment, net foreign direct investment (FDI) into India fell to $0.35 billion in 2024–2025, the lowest level in 20 years.
According to economists, the Indian rupee is performing worse than any other currency in Asia this quarter and might keep lagging behind its rivals as the RBI works to prevent its foreign exchange reserves from running out.
As of May 23, India's foreign exchange reserves were approximately $693 billion, a decrease from the record high of $705 billion set in September of last year.
According to data released Friday by the US Bureau of Economic Analysis, the US Personal Consumption Expenditures (PCE) Price Index increased 2.1% year over year in April after rising 2.3% in March. This number was less than the 2.2% market consensus.
Longer term, the USD/INR maintains its negative tone.
On this day, the Indian Rupee trades in positive territory. The path of least resistance is to the downside, as the USD/INR pair is still capped below the important 100-day Exponential Moving Average (EMA) on the daily timeframe. Given that the 14-day Relative Strength Index (RSI) is circling the midline, additional consolidation is not completely ruled out in the near future.
The low of May 26, 84.78, appears to be providing initial support for the USD/INR. A decline toward 84.61, the low of May 12, could be triggered by a breach below the aforementioned level. The psychological level and the trend channel's lower limit, 84.00, are the next bearish targets to keep an eye on.
However, the 100-day EMA and the upper edge of the trend channel are represented by the 85.55-85.65 zone, which also happens to be the pair's significant resistance level. The high of May 22, 86.10, might be reached by any follow-through purchases.
The INR is supported by stronger Indian GDP figures, but its upside may be limited by higher oil prices and RBI rate cut predictions.
Ahead of the RBI rate announcement later on Monday, traders anticipate the US May ISM Manufacturing PMI data.
The four-day losing skid is ended on Monday when the Indian Rupee (INR) bounces back. Through portfolio inflows and emotion, the positive India Q1 GDP report raises stocks and the value of the local rupee.
However, a spike in the price of crude oil could push the Indian rupee down. It is important to remember that India is the third-largest oil user in the world, and rising crude oil prices often devalue the Indian rupee. Furthermore, the INR's upside may be limited in the near future by the growing assumption that the Reserve Bank of India (RBI) will implement a third consecutive 25 basis point (bps) rate decrease to spur growth.
The US May ISM Manufacturing Purchasing Managers' Index (PMI) report, which is scheduled for release later on Monday, will be of interest to traders. The focus will be on the US Nonfarm Payrolls (NFP) statistics and the RBI interest rate announcement on Friday.
A trade deal between the US and India, which is formally anticipated to be finalized by fall, will also be eagerly watched by traders. A 90-day tariff moratorium on Indian imports expires on July 9 after US President Donald Trump imposed duties of up to 27% on them on April 2.
The positive India GDP data causes the Indian Rupee to increase.
The first quarter of 2025 saw India's GDP grow 7.4% YoY, up from 6.2% the quarter before and well above analyst forecasts of 6.7%.
Although growth has significantly slowed from the 9.2% peak seen in the fiscal year 2023–2024, India is still the largest economy with the quickest rate of growth in the world.
As increasing outbound foreign investment and repatriation by Indian businesses countered the inbound investment, net foreign direct investment (FDI) into India fell to $0.35 billion in 2024–2025, the lowest level in 20 years.
According to economists, the Indian rupee is performing worse than any other currency in Asia this quarter and might keep lagging behind its rivals as the RBI works to prevent its foreign exchange reserves from running out.
As of May 23, India's foreign exchange reserves were approximately $693 billion, a decrease from the record high of $705 billion set in September of last year.
According to data released Friday by the US Bureau of Economic Analysis, the US Personal Consumption Expenditures (PCE) Price Index increased 2.1% year over year in April after rising 2.3% in March. This number was less than the 2.2% market consensus.
Longer term, the USD/INR maintains its negative tone.
On this day, the Indian Rupee trades in positive territory. The path of least resistance is to the downside, as the USD/INR pair is still capped below the important 100-day Exponential Moving Average (EMA) on the daily timeframe. Given that the 14-day Relative Strength Index (RSI) is circling the midline, additional consolidation is not completely ruled out in the near future.
The low of May 26, 84.78, appears to be providing initial support for the USD/INR. A decline toward 84.61, the low of May 12, could be triggered by a breach below the aforementioned level. The psychological level and the trend channel's lower limit, 84.00, are the next bearish targets to keep an eye on.
However, the 100-day EMA and the upper edge of the trend channel are represented by the 85.55-85.65 zone, which also happens to be the pair's significant resistance level. The high of May 22, 86.10, might be reached by any follow-through purchases.
