- Indian Rupee gains strength at Monday's Asian session.
- Possible US-Indian trade transactions and lower oil prices support the INR, but cross-border tensions can increase it upside down.
- Traders are waiting for the US April Ism Services PMI report on Monday.
Indian rupee (INR) is on Monday. Positive developments related to US-Indian trade transactions increase by supporting the Indian currency. In addition, the decline in crude oil prices increases the INR as India is the third largest oil consumer in the world.
However, the tensions between India and Pakistan can drag the local currency lower. The Pakistani army said in a statement on Saturday that he carried a surface rocket on the surface of 450 kilometers. New Delhi has accused Islamabad about supporting the attack of Kashmir tourists last month.
Looking to the future, Monday is the highlight of the US April IsM Services Managers Index (PMI). On Wednesday, the Federal Reserve (Fed) interest rate will pay attention to the decision on Wednesday, which is expected to keep prices unchanged.
Indian rupee remains, reinforcing US-Indian trade negotiations and lower crude oil prices
- Indian foreign exchange reserves rose to $ 1.983 billion to $ 688,129 billion in the week ended on 25 April, celebrating the eighth consecutive weeks, according to the Indian Reserve Bank (RBI).
- RBI will buy 750 billion rupees ($ 8.88 billion) this week, followed by two more 250 billion rupees a month later.
- Until this year, he has bought 3.65 trillion rupees and 388 billion rupees through OMO on aftermarket debt. This unexpected injection of liquidity is likely to help political transmission and increases growth in the midst of global uncertainty in the middle, said Radhika Rao Rao Radhika, Managing Director of DBS Bank and Senior Economist.
- According to Deloitte's latest forecast, the Indian economy will grow estimated to be 6.6%in the financial year 2025-26.
- According to the US Work Statistics Bureau (BLS), the US Non -Farm payroll (NFP) increased in April. This figure followed the 185,000 increase in March (228k amended) and reached the market in 130,000 market.
- As expected, the US unemployment rate remained unchanged in April 4.2%. The average hourly income remained permanently at 3.8% of the Yoy during the same period. Finally, the participation rate in April noted to 62.6% in April, compared to 62.5% in March.
- Markets are now valued by almost 37% of Fed in June, which is less than 64% a month ago. Goldman Sachs and Barclays shifted their cuts in June in June.
USD/INR -I Bears Prejudice, Overcoming RSI will keep caution
Indian rupees reinforce the day. The USD/INR pair keeps a bear in the daily chart, with a price of less than 100 days of exponential moving average (mother). The 14-day relative strength index (RSI) is moving below 30.00, indicating transition conditions. This indicates that further consolidation or temporary recovery cannot be excluded.
The decisive break from the border of the descending trend channel potentially sets its sights to 84.22, to the lowest level of 25th November 2024. All followers under the level mentioned may have seen the next level of dispute 84.08, which is 6th November 2024.
On the valve side, the first guarded target is 85.14, the lowest of April 23, followed by a mother of 85.70, a 100-day mother. A pause above this zone can indicate a possible trend and pave the road to 86.25, which is the upper limit of the trend channel.
Indian rupee
Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of crude oil (the state largely depends on the imported petroleum), the US dollar value – most of the trade in USD – and foreign investment levels are all influential. Direct intervention in the Indian Reserve Bank (RBI) in the FX markets to keep the exchange rate stable, as well as the level of interest rates set by RBI, are also the main affecting factors of rupees.
The Indian Reserve Bank (RBI) is actively interfering with the Forex markets to maintain a stable exchange rate to help facilitate trade. In addition, RBI tries to maintain the inflation rate with its 4% purpose, adjusting interest rates. Higher interest rates usually strengthen rupees. This is due to the role of the carrier trade in which investors borrow in lower interest rates to invest their money in countries, “providing relatively higher interest rates and profits from the difference.
Macroeconomic factors affecting the value of rupees include inflation, interest rates, economic growth rate (GDP), trade balance and foreign investment. A higher growth rate can cause more foreign investments, increasing demand for rupees. The less negative trade balance will eventually lead to a stronger rupee. Higher interest rates, especially real rates (interest rates less inflation), are also positive for rupees. The risk environment can cause larger direct and indirect investments (FDI and FII), which also benefits rupees.
Higher inflation, especially if it is relatively higher than Indian peers, is generally negative about the currency as it reflects the devaluation through oversupply. Inflation also increases export costs, causing more rupees to buy foreign imports, which is rupee-negative. At the same time, higher inflation usually leads to raising interest rates in the Indian Reserve Bank (RBI) and may be positive for rupees as the demand for international investors is higher. The opposite effect applies to lower inflation.
