- Indian rupee brings strength in the early European session on Thursday.
- The weakness in its Asian peers and the high oil prices are undermining inr, but the US dollar sales between banks may help reduce their losses.
- PPI data in the United States in February and the first weekly fair demands will be the prominent points later on Thursday.
The Indian Rupee (INR) is trading a more stable memo on Thursday. The US dollar sales are widely provided among banks (USD) in a weak global risk environment some support for INR. No significant decrease in Indian rupee may be limited due to the intervention of possible foreign currencies from the Indian Reserve Bank (RBI).
However, the weakness in Asian currencies pulls the Indian currency less. Moreover, the bounce in crude oil prices can affect the local currency as India is the third largest oil consumer in the world and the high crude oil prices to a negative impact on the value of INR. Later on Thursday, traders will monitor the product price index data in February, along with the initial weekly unemployment.
The Indian rupee recovers despite the international opposite winds
- The consumer price index (CPI) increased by 3.61 % year on year in February, the lowest level in seven months. This number in the previous reading came from 4.31 % and 4.0 % expected.
- Consensus estimates indicate that the Indian Reserve Bank will reduce prices by 50 additional basis points (BPS) during the remaining period of 2025.
- The US consumer price index increased by 0.2 % in February after sharp progress by 0.5 % in January, according to work statistics on Wednesday. This number came in a softening of 0.3 % expectation. The basic consumer price index, with the exception of food and volatile food categories, increased by 0.2 % of the mother during the same period for 0.4 % before.
- On an annual basis, CPI enlargement in the United States rises to 2.8 % in February from 3.0 % in January, more softening than 2.9 % estimate. The basic CPI hypertrophy decreases to 3.1 % in February from 3.3 % in the previous month.
- The Treasury said on Wednesday that the US budget deficit for the first five months of the fiscal year 2025 amounted to $ 1.15 trillion. On a monthly basis, the United States’ deficit has a little more than $ 307 billion, which is 4.0 % higher than the previous year.
- Traders are fully priced in reducing the interest rate at a quarter of a point in June, with about 70 points of discounts expected during 2025.
The dollar/inr swings in a similar triangle
Indian rupee is trading a day. The USD/INR pair is unified inside a similar triangle on the daily chart. However, the bullish expectations of the husband remain intact as the price exceeds the SIA moving average for 100 days (EMA), while the relative strength index for 14 days (RSI) stands over the midfield.
The first budget of the US dollar/INR in 87.30 appears, the upper limits of a similar triangle. The gains over this level can witness that the assembly to 87.53, which is the highest level on February 28, is on its way to its highest level ever, which is 88.00.
On the other hand, the level of decisive support for the husband is located in 86.86, represents a decrease of March 6 and the minimum triangle style. To the south, the level of the next dispute to watch is 86.48, the lowest level on February 21, followed by 86.14, the lowest level on January 27.
Indian rupee questions and answers
Indian rupee (INR) is one of the most sensitive currencies for external factors. The price of crude oil (the country depends greatly on imported oil), and the value of the US dollar – most trade in US dollars – and the level of foreign investment are all influential. The direct intervention by the Indian Reserve Bank (RBI) in the foreign currency markets to maintain the exchange rate is stable, as well as the level of interest rates that RBI has placed, significant impressive factors in the rupee.
The Indian Reserve Bank (RBI) is actively interfering in the Forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, RBI tries to keep the inflation rate in its goal by 4 % by setting interest rates. High interest rates usually enhance rupee. This is due to the role of “Trade Trade” in which investors in countries that have lower interest rates are borrowed in order to put their money in countries “that provide relatively higher interest rates and profit from the teams.
The total economic factors that affect the value of rupees include inflation, interest rates, economic growth rate (gross domestic product), trade balance, and flows from foreign investment. A higher growth rate can lead to more investment abroad, which increases the demand for rupee. The less negative trade balance will eventually lead to a stronger rupee. High interest rates, especially real prices (less inflationary interest rates) are also positive for rupee. The risk environment can lead to increased direct and indirect foreign investment flows (FDI and FII), which also benefits rupee.
The highest inflation, in particular, if it is relatively higher than its peers in India, is generally negative for the currency because it reflects the reduction in the value of the currency. Inflation also increases the cost of exports, which sells more rupees to buy foreign imports, which is negative rupee. At the same time, high inflation usually raises the Indian Reserve Bank (RBI) interest rates, and this may be positive for rupee, due to increased demand from international investors. The opposite effect applies to low inflation.
