The Indian Rupee (INR) gains ground against the US Dollar (USD) as the latter weakens. Reserve Bank of India (RBI) Governor Shaktikanta Das predicts a growth rate close to 8.0% for the Indian economy in FY24, surpassing the government’s estimate of 7.6%.
Investors are eyeing the US weekly Initial Jobless Claims and Fed Chair Powell’s second testimony for market cues. Economists anticipate USD/INR to trade within a narrow range in the coming months, with modest upward movement due to RBI interventions in currency markets.
Das’s positive remarks about India’s economic growth and stable external factors contribute to the INR’s strength. However, the USD’s potential rise, supported by higher US Treasury bond yields and oil prices, may limit the downside for USD/INR.
The market focus remains on US economic data releases, including the Nonfarm Payrolls report on Friday, which is expected to show 200K job additions in February.
In technical analysis, USD/INR continues to trade within a descending trend channel, with crucial support at 82.65. A break below this level could lead to further downside towards 82.45 and 82.25. Conversely, a bullish breakout above the 100-day Exponential Moving Average (EMA) and the psychological level of 83.00 may push the pair towards 83.15 and potentially 84.00.
US Dollar price today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
USD | -0.04% | -0.02% | -0.03% | -0.27% | -0.62% | -0.30% | -0.12% | |
EUR | 0.03% | 0.01% | 0.00% | -0.24% | -0.59% | -0.28% | -0.08% | |
GBP | 0.02% | -0.01% | -0.01% | -0.25% | -0.61% | -0.28% | -0.09% | |
CAD | 0.03% | 0.00% | 0.00% | -0.25% | -0.60% | -0.30% | -0.09% | |
AUD | 0.26% | 0.23% | 0.24% | 0.23% | -0.35% | -0.05% | 0.16% | |
JPY | 0.62% | 0.58% | 0.59% | 0.57% | 0.35% | 0.31% | 0.50% | |
NZD | 0.29% | 0.27% | 0.28% | 0.27% | 0.04% | -0.31% | 0.19% | |
CHF | 0.10% | 0.07% | 0.08% | 0.08% | -0.15% | -0.51% | -0.19% |
INDIAN RUPEE FAQS
What are the main reasons propelling the Indian rupee?
The Indian rupee (INR) is one of the most vulnerable currencies to exogenous shocks. The price of crude oil (the nation is heavily reliant on imported oil), the value of the US dollar (most commerce is done in USD), and the degree of foreign investment are all important. Direct involvement of the Reserve Bank of India (RBI) in FX markets to keep the currency rate constant, as well as the RBI’s interest rate policy, are also key influencing factors on the rupee.
How do the decisions of the Reserve Bank of India impact the Indian Rupee?
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
How does inflation affect the Indian rupee?
greater inflation, especially if it is greater than India’s peers, is typically bad for the rupee since it signals depreciation due to overstock. Inflation also raises the cost of exports, causing more rupees to be sold to buy foreign imports, resulting in a negative rupee balance. At the same time, increasing inflation often leads to the Reserve Bank of India (RBI) boosting interest rates, which might benefit the rupee owing to increased demand from overseas investors. The reverse is true with lower inflation.