The dollar is still stronger with the struggle of Indian rupee at the request of a strong importer
- The Indian rupee continues to be weak amid a request to renew the US dollar from importers and continuous foreign money flows.
- The US dollar may face the opposite wind as the US dollar is under pressure after MOODY reduction to the American credit classification.
- Inr finds some support from low crude oil prices, driven by reports of progress in US -Iranian nuclear talks.
The Indian Rupee (INR) is still defeated against the US dollar (USD) on Monday, as it continued its losing plan for the sixth consecutive day. Moreover, the new demand for the US dollar continues from importers and continuous external flows of foreign funds to influence INR.
However, the upward trend of USD/Inr The husband can be limited like US dollar (USD) is subjected to renewable pressure after reducing the Moody’s Investors service from the American credit rating through one degree, noting the high levels of debt and facing payment obligations.
However, INR receives support from a decrease in crude Oil pricesAmid reports on progress in American -Iranian nuclear negotiations, which can help reduce the negative side of the rupee. The President of Iran again affirmed his country’s commitment to continuing the talks with the United States while identifying its nuclear rights. Given that India is the third largest oil consumer in the world, low oil prices generally support rupee by reducing the import bill in the country.
Indian rupee decreases despite the weakness of the US dollar
- The US dollar index (DXY), which tracks Greenback for a basket of six main currencies, is trading less in about 100.80 at the time of writing this report. The US dollar is facing challenges as Moody rated the American credit rating from AAA to AA1, in line with previous discounts through Fitch rankings in 2023 and Standard & Poor’s in 2011.
- Moody’s now expects that American federal debts will rise to approximately 134 % of GDP by 2035, up from 98 % in 2023. The federal deficit is expected to accommodate about 9 % of GDP, and is fueled by the costs of increasing debt, increasing spending on entitlement rights, and tax revenues decreased.
- A series of weak American economic indicators has strengthened the expectations of price discounts by the Federal Reserve later this year. It is worth noting that the Consumer feelings index at the University of Michigan decreased sharply to 50.8 in May from 52.2 in April, the lowest level since June 2022 and a monthly decrease in a row. Analysts expected an increase to 53.4.
- The US dollar may find some support from mitigating global trade tensions. An initial trade agreement between the United States and China proposes significant cuts in the customs tariff – Washington is to decrease low duties on Chinese goods from 145 % to 30 %, while Beijing will reduce definitions of American imports from 125 % to 10 %.
- Market feelings are also raised through renewed optimism against a possible nuclear deal and the upcoming talks between US President Donald Trump and Russian President Vladimir Putin, who aims to cancel Ukraine’s ratification.
- BSE Sensex increased in India by 3.6 % last week, recovering from the decrease in the previous week. This gathering was provided by eliminating geopolitical tensions between India and Pakistan, increasing optimism about trade relations between India and the United States, and domestic interest rate discounts.
- Meanwhile, a high -ranking Indian delegation led by Minister of Trade and Industry Bio Joyl will meet with American commercial actor Jameson Jarir and Minister of Trade Howard Lottenic during his visit, which will continue until May 20.
USD/INR rises above 85.50 amid mixed bias to urinary
Indian rupee continues its losing plan for the sixth consecutive day, as the US dollar pair/INR is trading near 85.60 on Monday. Technical indicators maintain the daily chart on a budget, as the husband moves up within the style of an upward channel. In addition, the 24 -day relative index (RSI) remains higher than the level of 50, indicating the presence of continuous upward feelings.
The USD/INR pair can target the highest monthly level of 85.90, which was reached on May 9. A higher break from this level may allow the husband to explore the area around the upper boundaries of the emerging canal at 86.40.
The immediate support on the SIA moving average lies for nine days (EMA) is around 85.30, followed by the lower boundaries of the emerging canal at 85.10. The decisive rest at the bottom of this region may undermine short -term upward attempts and open the door to a decrease to its lowest level in eight months at 83.76.
The risks of feelings common questions
In the world of financial terminology, the two terms are widely indicated by “risk” and “risk” to the level of risks that investors in the stomach want during the aforementioned period. In the “risk” market, investors are optimistic about the future, and therefore they are more willing to buy risky assets. Relatively modest.
Usually, during periods of “risks”, stock markets will rise, most goods-with the exception of gold-value, will benefit from positive growth expectations. The currencies of countries that are a source of heavy goods are enhanced due to increased demand and the height of encrypted currencies. In the “risk” market, the bonds-especially the major government-golden barking bonds, and safe clips such as the Japanese yen, the Swiss franc and the US dollar.
The Australian dollar (AUD), the Canadian dollar (CAD), the New Zealand dollar (NZD) and the small FX such as RUBLE (RUB) and Rand South African (Zar), tend to rise in the “risk” markets. This is because the economies of these currencies are largely dependent on the exports of the basic commodity for growth, and the goods tend to rise in prices during the risk periods. This is because investors expect more demand for raw materials in the future due to an increase in economic activity.
The main currencies that tend to rise during “risk” periods are the US dollar (US dollar), Japanese yen (JPY) and Swiss franc (CHF). The US dollar, because it is the world’s reserve currency, and because investors in times of crisis buy the debts of the US government, which are safe because the largest economy in the world is unlikely to fail to pay. Elaine, from increasing demand for Japanese government bonds, because a high percentage is kept by local investors who are unlikely to get rid of them – even in a crisis. The Swiss franc, because strict Swiss banking laws provide investors to protect capital.
