- The Indian rupe is losing ground during the first European session on Friday.
- The climbing of geopolitical tensions after the Kashmir attack could undermine the INR.
- Positive developments in commercial talks and continuous foreign entries could limit the disadvantages of the pair.
Friday, Indian Roupie (INR) is weakening, under pressure by the renewed demand in US dollars (USD). Increased geopolitical tensions after a terrorist attack in Pahalgam, Jammu and Kashmir also lead the Indian currency.
Nevertheless, optimism surrounding the American commercial talks in India could provide some support for the Indian currency. Currently, the reciprocal price of 26% on India that the United States has imposed is on a 90-day break. The suspension will expire on July 8. India is faced with a tariff of 10% as other nations according to American trade policy. In addition, the increase in the entries of foreign institutional investors (FII) could contribute to the increase in the INR. Investors will have an eye on the final reading of the feeling of American consumers from Michigan later on Friday.
The exchanges of Indian rupees were softer in the middle of the growing tensions between India and Pakistan
- According to the Reuters survey, the Reserve Bank of India is expected to reduce the repo rate to 5.50% by end-Q3 (compared to 5.75% in the March ballot).
- The economy of India will grow 6.3% in 2025-26 and 6.5% in 2026-27 (vs 6.5% and 6.5% in the March survey), Reuters Poll.
- Asked about how the American rates affected the feeling of companies in India, 60% of economists, 21 out of 35, said that the impact was negative or very negative. Meanwhile, 14 economists said it was neutral.
- Pakistan has announced a series of diplomatic reprisals against India and asked for evidence to support the statements of the Indian government that Islamabad was involved in the Kashmir attack.
- US Treasury Secretary Scott Bessent suggested that India is likely to become the first country to finalize a bilateral trade agreement with the United States to avoid Trump's reciprocal prices on Indian exports.
- Minneapolis President Fed, Neel Kashkari, said Thursday evening that he feared that with uncertainty, companies would make dismissals.
USD / INR's lower perspectives remain in place
The Indian roupe is negotiated sweeter by day. However, the lower tone of USD / INR The pair prevails because the pair is lower than the exponential average of 100 days (EMA) on the daily time. The relative resistance index of 14 days (RSI) is below the midline nearly 38.35, which suggests that further is favorable.
The first drop -down target to watch is 84.85, the lower limit of the downward trend canal. The exchanges supported below this level could open the door for a movement around 84.22, the lowest of November 25, 2024. The following compression level is observed at 84.08, the lowest of November 6, 2024.
On the right side, the EMA from 100 days to 85.82 acts as an immediate level of resistance for the USD / INR. A decisive break above the mentioned level could see an increase at 86.45, the upper limit of the trend channel.
FAQ of risks
In the world of financial jargon, the two widely used terms “risk” and “risk off” refer to the level of risk that investors are willing to etan during the referenced period. modest.
In general, during periods of “risk”, stock markets will increase, most raw materials – except gold – will also gain in value, because they will benefit from a perspective of positive growth. The currencies of nations which are heavy exporters of basic products are strengthened due to increased demand and cryptocurrencies increase. In a “risk” market, obligations increase – in particular large state obligations – gold shines and forfeited currencies such as the Japanese yen, the Swiss franc and the US dollar in all.
The Australian dollar (AUD), the Canadian dollar (CAD), the New Zealand dollar (NZD) and the FX minor such as the Rouble (Rub) and the South African rand (ZAR), all tend to increase on the “risk” markets. Indeed, the savings of these currencies depend strongly on exports of basic products, and basic products tend to increase the price during risk periods. Indeed, investors provide for greater demand for raw materials in the future due to increased economic activity.
The main currencies that tend to increase during “risk” periods are the US dollar (USD), the Japanese yen (JPY) and the Swiss franc (CHF). The US dollar, because it is global reserve currency, and because in times of crisis, investors buy American public debt, which is considered safe because the greatest economy in the world is unlikely to be lacking. The yen, increased demand for bonds from the Japanese government, because a high proportion is held by national investors who are unlikely to pour them – even in crisis. The Frankish Swiss, because strict Swiss banking laws provide investors with improved capital protection.
