During Monday's early European session, the Indian Rupee depreciates.
The INR is weakened by ongoing withdrawals from Indian stocks and the possibility of a worldwide trade war.
INR's losses could be minimized with RBI involvement and lower crude oil prices.
On Monday, the Indian Rupee (INR) is trading negatively. Concerns about trade tariffs, continuous economic uncertainty, and steady withdrawals from local stocks have kept the local currency on the defensive. So far this year, foreign investors have taken out about $15 billion from Indian shares, putting outflows on pace to surpass the record $17 billion seen in 2022. India's market value has dropped by $1.3 trillion as a result of the selloff.
However, a reduction in crude oil prices would help limit the INR’s losses given India is the world's third-largest oil user. Additionally, the Reserve Bank of India (RBI) is expected to continue defending the INR, with the government expressing optimism that the central bank’s intervention would slow the pace of the decline. This could therefore limit the pair's upside. The USD will have an impact on the USD/INR pair on Monday since the US and India will not be releasing their top-tier economic data.
Due to ongoing outflows and worldwide uncertainty, the Indian Rupee is still weak.
In an effort to facilitate lending and spur economic expansion, the RBI said last week that it will inject $21 billion in Rupee liquidity into the banking system.
According to data released by the US Bureau of Labor Statistics (BLS) on Friday, the US Nonfarm Payrolls (NFP) increased by 151K in February as opposed to 125K (revised from 143K) in January. This number was lower below the 160K market expectation.
Mary Daly, the president of the San Francisco Fed, stated late Sunday that while increased business uncertainty may reduce demand in the US economy, it does not warrant an interest rate change.
Fed Chair Jerome Powell warned on Friday that the US central bank finds it challenging to implement policy changes when there is policy uncertainty.
Despite short-term consolidation, the USD/INR shows promise.
During the day, the Indian Rupee is trading in a negative territory. The price of the USD/INR pair is still above the important 100-day Exponential Moving Average (EMA) on a daily basis, indicating a positive outlook. The 14-day Relative Strength Index (RSI), which is above the midline at 55.0 and demonstrates bullish demand, supports the upward trend.
The high of February 28, 87.53, is the immediate resistance level for USD/INR. If there is a clear break above this level, buying pressure may increase to an all-time high close to 88.00, which would lead to 88.50.
However, the February 21 low of 86.48 is the first downward target to keep an eye on. Long-term declines may push the pair down to January 27's low of 86.14 and January 6's low of 85.60.
The INR is weakened by ongoing withdrawals from Indian stocks and the possibility of a worldwide trade war.
INR's losses could be minimized with RBI involvement and lower crude oil prices.
On Monday, the Indian Rupee (INR) is trading negatively. Concerns about trade tariffs, continuous economic uncertainty, and steady withdrawals from local stocks have kept the local currency on the defensive. So far this year, foreign investors have taken out about $15 billion from Indian shares, putting outflows on pace to surpass the record $17 billion seen in 2022. India's market value has dropped by $1.3 trillion as a result of the selloff.
However, a reduction in crude oil prices would help limit the INR’s losses given India is the world's third-largest oil user. Additionally, the Reserve Bank of India (RBI) is expected to continue defending the INR, with the government expressing optimism that the central bank’s intervention would slow the pace of the decline. This could therefore limit the pair's upside. The USD will have an impact on the USD/INR pair on Monday since the US and India will not be releasing their top-tier economic data.
Due to ongoing outflows and worldwide uncertainty, the Indian Rupee is still weak.
In an effort to facilitate lending and spur economic expansion, the RBI said last week that it will inject $21 billion in Rupee liquidity into the banking system.
According to data released by the US Bureau of Labor Statistics (BLS) on Friday, the US Nonfarm Payrolls (NFP) increased by 151K in February as opposed to 125K (revised from 143K) in January. This number was lower below the 160K market expectation.
Mary Daly, the president of the San Francisco Fed, stated late Sunday that while increased business uncertainty may reduce demand in the US economy, it does not warrant an interest rate change.
Fed Chair Jerome Powell warned on Friday that the US central bank finds it challenging to implement policy changes when there is policy uncertainty.
Despite short-term consolidation, the USD/INR shows promise.
During the day, the Indian Rupee is trading in a negative territory. The price of the USD/INR pair is still above the important 100-day Exponential Moving Average (EMA) on a daily basis, indicating a positive outlook. The 14-day Relative Strength Index (RSI), which is above the midline at 55.0 and demonstrates bullish demand, supports the upward trend.
The high of February 28, 87.53, is the immediate resistance level for USD/INR. If there is a clear break above this level, buying pressure may increase to an all-time high close to 88.00, which would lead to 88.50.
However, the February 21 low of 86.48 is the first downward target to keep an eye on. Long-term declines may push the pair down to January 27's low of 86.14 and January 6's low of 85.60.
