In the early Asian session on Wednesday, the Indian Rupee (INR) is holding steady, despite the announcement by Finance Minister Nirmala Sitharaman to raise capital gains tax, putting pressure on the currency. Investors are keeping an eye on the upcoming Indian and US PMI data for July.
Despite the potential impact of the capital gains tax increase on the INR, interventions by the Reserve Bank of India (RBI) and falling crude oil prices could help mitigate losses in the currency. The flash Indian HSBC Purchasing Managers Index (PMI) for July and the preliminary US S&P Global PMI data are also key factors to watch.
Daily Digest Market Movers: Indian Rupee Faces Headwinds
- India’s benchmark equity indexes, the BSE Sensex and Nifty 50, saw significant losses on Tuesday.
- Changes in securities transaction taxes and capital gains tax were announced by Finance Minister Nirmala Sitharaman.
- The Indian government aims to promote the INR for overseas investments through simplifying regulations.
- US economic indicators, such as Existing Home Sales and Richmond Fed Manufacturing Index, also impact market sentiment.
Technical Analysis: INR Maintains Bearish Bias
Technical analysis shows the INR trading flat, with a potential bearish bias in the longer term. The USD/INR pair remains bullish, supported by the 100-day Exponential Moving Average (EMA) and the Relative Strength Index (RSI) in the bullish zone. Resistance levels and downside targets are key to watch for potential price movements.
US Dollar Price Today
The US Dollar (USD) shows varying percentage changes against major currencies today, with the Japanese Yen being the strongest performer. The heat map provides a visual representation of currency movements.
Indian Rupee FAQs
- External factors like Crude Oil prices and US Dollar value influence the INR.
- The RBI intervenes in FX markets to stabilize the exchange rate and adjust interest rates.
- Macroeconomic factors like inflation, interest rates, and GDP growth impact the Rupee’s value.
- Inflation and trade balances also play a role in determining the Rupee’s strength.
Overall, the Indian Rupee’s stability and potential for growth depend on a combination of domestic policy changes, global economic indicators, and market sentiment. Understanding these factors can help individuals make informed decisions about their investments and financial strategies.