The Indian Rupee (INR) is facing weakness in Wednesday’s early Asian session due to high demand for the US Dollar (USD) for month-end payments. The cautious mood and escalating geopolitical tensions in the Middle East are also contributing to the decline of the INR. However, lower crude oil prices and potential intervention by the Reserve Bank of India (RBI) could limit the losses.
Investors are closely watching the Federal Reserve’s (Fed) interest rate decision, expected to hold rates between 5.25%-5.50%. Fed Chair Jerome Powell’s press conference may provide insights into future rate cut plans. The final reading of HSBC Manufacturing PMI in India is also anticipated to improve to 58.5 in July.
Daily Digest Market Movers: Indian Rupee Vulnerable Near Record Lows
- Foreign investors invested $509.9 million in Indian shares on July 26, while withdrawing $78.7 million from Indian bonds.
- RBI imposed restrictions on foreign ownership of newly issued bonds to manage capital inflow due to inclusion in JPMorgan’s emerging market index.
- US Job Openings and Labor Turnover Survey (JOLTS) reported 8.184 million job openings in June.
- US Consumer Confidence rose to 100.3 in July.
- Markets anticipate a 64% chance of three rate cuts by the Fed this year.
Technical Analysis: USD/INR’s Constructive Outlook
USD/INR pair maintains a bullish outlook with support from the 100-day EMA and an uptrend line since June. The RSI indicates bullish momentum, with resistance at 83.85 and potential for further gains towards 84.00. Support levels are at 83.72, 83.51, and 83.44.
US Dollar Price in Last 7 Days
The US Dollar showed strength against major currencies, particularly the Australian Dollar. The table below displays percentage changes in USD against EUR, GBP, CAD, AUD, JPY, NZD, and CHF.
Analysis: The weakening Indian Rupee against the US Dollar reflects global economic trends and geopolitical risks. Investors should monitor Fed decisions and Indian economic indicators for potential impacts on their finances and investments.