- Indian rupee stabilizes in Monday’s Asian session.
- Concerns about geopolitical tensions between India and Pakistan weigh on Indian rupee.
- The increase in foreign tickets and the fall in crude oil prices could help limit the losses of the INR.
Indian rupee (INR) remains flat on Monday. The growing tension with Pakistan could trigger a feeling of risk aversion among operators, which could drag the Indian currency down. The rape of the high fire along the control line (LOC) occurred days after the terrorist attack in Pahalgam, which killed 26 people, mostly tourists, in the Baisaran Valley near Pahalgam, Jammu and Kashmir.
On the other hand, foreign portfolio investors (FPI) continued to buy Indian shares for the seventh consecutive day. This, in turn, could boost the local currency against the dollar in the short term. In addition, the fall in crude oil prices could contribute to the increase of the INR, since India is the third largest consumer of crude oil in the world.
The manufacturing business index of the US Dallas Fed for April will be published later on Monday. The preliminary reading of the US gross domestic product (GDP) for the first quarter (Q1) will be at the Center for Wednesday, before the US Non -Agricultural Payroll (NFP) report, which will be published later on Friday.
The Indian Rupia is quoted flat while the Indian-Pakistan tensions increase in Kashmir
- The tensions between India and Pakistan are increasing after Pakistan raped a high fire along the Loc after the terrorist attack in Pahalgam. On Thursday night, hours after suspending the 1971 Simla agreement, the Pakistani army broke the truce along the LOC and began shooting in several places. The Indian army has responded “effectively.”
- The India Reserve Bank is expected to reduce the resting rate at 5.50% by the end of the third quarter (compared to 5.75% in the March survey), according to the Reuters survey.
- The US Secretary of Agriculture, Brooke Rollins, said Sunday that the Trump administration is having daily conversations with China about tariffs, according to Reuters. Rollins added that there were ongoing conversations between the two nations and that the trade agreements with other countries were “very close.”
The president of the USA, Donald Trump, said Friday that the US will be reasonable in tariffs, adding that the markets are adjusting to the tariff policy. - The feeling of the consumer of the University of Michigan (UOM) in April rose to 52.2 from 50.8 in the previous reading, better than the estimation of 50.8. The inflation expectations of consumers for one year were reduced to 6.5% in April compared to the previous 6.7%.
The USD/INR prospects are still bassists below the 100 -day EMA
The Indian rupee is quoted in the day. The negative USD/INR pair is maintained intact, characterized by the price that is maintained below the average exponential mobile (EMA) key of 100 days in the daily chart. In addition, the 14 -day relative force (RSI) index is below the midline about 41.00, supporting sellers in the short term.
The lower limit of the descending trend channel at 84.80 acts as an initial support level for the USD/INR. Extended losses could see a fall at 84.22, the minimum of November 25, 2024. More to the south, the additional filter to the decline is 84.08, the minimum of November 6, 2024.
In the upward case, the first upward barrier is at 85.80, the 100 -day EMA. If the torque breaks above this level, it could attract more bull pressure and push to the torque towards 86.35, the upper limit of the trend channel.
India Faqs Rupia
Indian rupee (INR) is one of the most sensitive currencies to external factors. The price of crude oil (the country depends largely on imported oil), the value of the US dollar (most of the trade is carried out in US dollars) and the level of foreign investment are all influential factors. The direct intervention of the Bank of the Reserve of India (RBI) in the currency markets to keep the exchange rate stable, as well as the level of the interest rates set by the RBI, are other important factors that influence the rupee.
The Bank of the Reserve of India (RBI) actively intervenes in the currency markets to maintain a stable exchange rate and help facilitate trade. In addition, the RBI tries to maintain the inflation rate in its 4% target adjusting interest rates. Higher interest rates often strengthen rupee. This is due to the role of the “Carry Trade”, in which investors borrow in countries with lower interest rates to place their money in countries that offer relatively higher interest rates and benefit from difference.
Macroeconomic factors that influence the value of rupee include inflation, interest rates, economic growth rate (GDP), trade balance and foreign investment tickets. A higher growth rate can lead to greater investment abroad, increasing the demand for rupee. A less negative trade balance will eventually lead to a stronger rupee. The highest interest rates, especially real types (less inflation interest rates) are also positive for rupee. A risk environment can generate higher direct and indirect foreign investment entries (FI and FII), which also benefit the rupee.
Higher inflation, particularly if it is comparatively higher than other countries, is generally negative for the currency, since it reflects a devaluation through excess supply. Inflation also increases the cost of exports, which leads to more rupees to buy foreign imports, which is negative for Indian rupee. At the same time, higher inflation usually leads to the Bank of the Reserve of India (RBI) to raise interest rates and this can be positive for rupee, due to the increase in demand for international investors. The opposite effect applies to lower inflation.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
