The Indian Rupee Faces Headwinds in Friday’s Asian Session
- Indian Rupee Weakens: The Indian Rupee (INR) is on a downward trend in Friday’s trading session due to the stronger US Dollar (USD).
- Factors Affecting INR: Sustained outflows of foreign funds from India and the increasing prices of crude oil are putting pressure on the INR. Additionally, the US inflation data and hawkish statements from Federal Reserve (Fed) officials are also contributing to the INR’s decline.
- RBI Intervention: The Reserve Bank of India (RBI) may intervene in the foreign exchange market to limit the losses of the INR.
Key Highlights for Friday
- US Data: The US Producer Price Index (PPI) for September and the preliminary reading of the Michigan Consumer Sentiment Index for October will be closely watched by market participants.
- Indian Data: Industrial Production and Manufacturing Output figures for India will also be released on Friday.
Daily Digest Market Movers
- FTSE Russell Announcement: Indian sovereign bonds will be added to the Emerging Markets Government Bond Index (EMGBI), following similar moves by JP Morgan and Bloomberg Index Services.
- US Inflation Data: The US Consumer Price Index (CPI) for September exceeded expectations, with Core CPI climbing higher than forecasts.
- Fed Officials’ Comments: Statements from Federal Reserve officials indicate a shift towards a more neutral monetary policy stance in the coming months.
Technical Analysis: USD/INR Outlook
The USD/INR pair maintains a bullish trend in the longer term, with key levels to watch:
- Resistance Levels: The 84.00 psychological level and the previous high of 84.15 are key resistance points for USD/INR.
- Support Levels: Initial support is near 83.90, followed by the 100-day Exponential Moving Average (EMA) at 83.68 and the round mark of 83.00.
Indian Rupee FAQs
- Factors Influencing INR: Crude oil prices, US Dollar value, foreign investment, RBI interventions, and interest rates all impact the Indian Rupee.
- RBI Role: The Reserve Bank of India intervenes in forex markets to maintain stability and adjusts interest rates to control inflation.
- Macroeconomic Factors: Inflation, interest rates, GDP growth rate, trade balance, and foreign investment inflows all play a role in determining the value of the Rupee.
- Impact of Inflation: Higher inflation can be negative for the Rupee due to devaluation, but can also lead to increased demand from international investors.