- The Indian rupee is trading a flat note in the Asian session on Thursday.
- The high demand for the US dollar and the ongoing capital flows are undermined inr, but RBI intervention may achieve its negative aspect.
- The estimate of the Q4 GDP report in the United States will occupy the lead center later on Thursday.
Indian rupee (INR) maintains a stability on Thursday. The local currency is still at a defensive level due to the request of importers at the end of the month (USD). In addition, capital flows contribute amid uncertainty about the American commercial tariffs on the negative side of the inr. However, the intervention of possible foreign currencies by the Indian Reserve Bank (RBI) may help reduce the low value of the Indian rupee.
Looking at the future, merchants will monitor the appreciation of the GDP of the United States (GDP) for the fourth quarter (Q4), as well as weekly unemployment claims, which are scheduled to be later on Thursday. Fedspeak will be focused as it may provide some hints on the US interest rate course. Michelle Bowman, Michelle Bowman, Beth Hamak and Patrick Harker will speak.
Indian rupee stability amid the demand for the dollar and foreign external flows
- “The rupee was circulated very weak with the continued sale of FII, and crude oil prices remained high amid the American tariffs on Iran, which prompted the demand for oil up.” Said two Trevidy, a research analyst at LKP Securities, said the dollar index at 106.65 is also added to the pressure on the rupees.
- Late on Wednesday, US President Donald Trump repeated his insistence on a 25 % tariff for Canada and Mexico, as well as adding the European Union (the European Union) to the list of countries from which American consumers will be punished for importing.
- New homes in the United States decreased by 10.5 % illiterate to 657,000 units in January from 734,000 units (reviewed from 698,000) in the previous reading, according to the Ministry of Commerce Census Office on Wednesday. This number came in the weaker than 680,000 expected units.
- The Federal Reserve Chairman at Atlanta Rafael Bustic said late on Wednesday that the Federal Reserve should carry interest rates where, at a level that continues to pressure inflation, for each Bloomberg.
- The head of the Federal Reserve at Richmond Thomas Parkin indicated that he will follow the waiting and vision approach regarding the interest price policy in the central bank until the clear inflation returns to the goal of the Federal Reserve by 2 %.
The dollar/INR’s view is still bullish despite the shortest monotheism
The Indian rupee is trading flat per day. USD/INR maintains a constructive view of the daily chart, which features a price that is held higher than the 100 -day SIA moving average (EMA). The bullish momentum is strengthened by the 14 -day relative index (RSI), which stands over the midfield near 59.50, indicating that the other bullish trend seems favorable.
In the upscale case, the first bullish goal to watch is 87.25, which is the height of February 25. The extended gains above this level can pay the price to the highest level ever near 88.00. The following obstacle is shown in 88.50.
On the other hand, the lowest level on February 21 works in 86.48 as a preliminary support level for the husband. To the south, the next dispute level is 86.14, the lowest level on January 27, followed by 85.65, the lowest level on January 7.
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 leads to the raising of 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.
