The Indian Rupee (INR) is showing strength in Friday’s Asian session, defying the stronger US Dollar trend. The positive momentum in Indian equities is providing support to the INR, signaling potential foreign investment inflows. However, the surge in crude oil prices could limit the upside for the INR, considering India’s significant oil import dependence.
On the economic front, the Indian GDP Quarterly report for the first quarter of fiscal 2024-25 (FY25) is scheduled for release on Friday, with an expected growth rate of 6.9% YoY in Q1. Additionally, the US Personal Consumption Expenditure (PCE) inflation data will be closely watched for insights into the Fed’s upcoming rate decision in September.
Market Movers: Indian Rupee Influenced by Domestic Equity Inflows and Global Factors
- MSCI’s increased weightage for Indian equities in the emerging market index could attract up to $3 billion in inflows, boosting the INR.
- US GDP growth for Q2 was revised higher to 3.0%, surpassing expectations and indicating a strong economic performance.
- New jobless claims in the US declined, reflecting a positive labor market trend.
- Fed officials are divided on the need for rate cuts, with market expectations leaning towards a 25 basis points cut in September.
Technical Analysis: USD/INR Trend Outlook
The USD/INR pair is facing resistance near the 84.00 level, with a bullish bias supported by the 100-day Exponential Moving Average (EMA) on the daily chart. However, the RSI suggests a neutral momentum phase, hinting at possible consolidation in the near term.
Key levels to watch include 84.00 as a resistance barrier, with a potential rally towards 84.24 and 84.50 in case of sustained bullish momentum. On the downside, 83.77 and 83.61 are initial support levels for the pair.
US Dollar Performance Against Major Currencies
The table below shows the percentage change of the US Dollar (USD) against major currencies this week, highlighting the currency’s performance in the global forex market.
In summary, the Indian Rupee’s strength in the face of global economic trends and domestic factors reflects a resilient currency supported by market dynamics. Investors should monitor key economic data releases and market developments to make informed decisions regarding their financial portfolios.