- The Indian rupee quotes on negative terrain in the Asian session on Thursday.
- The attacks in Kashmiro created a negative feeling, weighing on the INR.
- Initial weekly applications of unemployment subsidy in the US will be published later on Thursday.
The Indian rupee (INR) faces some sale pressure on Thursday due to terrorist attacks in Kashmir, India, that weighed on the feeling. In addition, the increase in crude oil prices undermines Indian currency, since India is the third largest oil consumer in the world.
However, the weakest US dollar could help limit inr losses. Investors will be attentive to the initial weekly applications of unemployment subsidy in the US that will be published later on Thursday. The National Activity Index of the Chicago Fed, the orders of durable goods and the sales of existing housing later on Thursday will also be published.
Indian rupee weakens as the feeling of risk deteriorates
- Late on Wednesday, the administration of US President Donald Trump declared that he has spoken with 90 countries about tariffs already. The Administration said that the US will establish tariffs for China in the next two to three weeks, and it depends on China how soon tariffs can be reduced.
- At least 28 people died and many were injured on Tuesday when the terrorists opened fire in a picturesque Prado near Pahalgam’s tourist city in J&K, marking the deadliest attack since 2019.
- India has promised to retaliate against the terrorist attack in the northern region of Jammu and Kashmir. The US, China and other nations also strongly condemned the attack on Wednesday.
- The Indian HSBC Manufacturing (PMI) manufacturing managers index improved 58.4 in April from 58.1 in March. India’s PMI rose to 59.1 in April compared to 58.5 above. Finally, the compound PMI rose to 60.0 in April from 59.5 in March.
- A preliminary reading of the PMI composed of the US Global S&P fell to 51.2 in April from 53.5 in March. Meanwhile, the manufacturing PMI rose to 50.7 in April from the previous reading of 50.2, better than the estimate of 49.4. The PMI of services was reduced to 51.4 in April compared to 54.4 above, below the 52.8 market consensus.
- According to the Beige Book Report of the Federal Reserve (FED) on Wednesday, companies that deal with the early stages of Trump’s tariffs are looking for ways to transfer growing costs to consumers.
- The president of the Bank of the Federal Reserve of Cleveland, Beth Hammack, said on Wednesday that the conditions still support continuous reductions in the balance of the Central Bank.
The bassist bias of the USD/INR is maintained despite the intradic earnings
Indian rupee weakens in the day. However, in the long term, the bass perspective of the USD/INR torque remains intact since the price is below the exponential (EMA) mobile average of 100 days in the daily time frame. The downward impulse is reinforced by the 14 -day relative force (RSI) index, which is below the midline about 44.35.
The initial support level for the USD/INR is found in 84.85, the lower limit of the descending trend channel. Extended losses could expose 84.22, the minimum of November 25, 2024. The next objective is seen at 84.08, the minimum of November 6, 2024.
In the upward case, the immediate resistance level for the pair arises at 85.85, the 100 -day EMA. Further north, the next obstacle to monitor is 86.45, 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.
