Indian Rupee ended lower against the greenback after the US economy expanded by 2.1% in Q3 of 2019.
On the currency market, the Rupee appreciated by 20 paise settling at 71.10 (New York close based-price) to trade at a two week high against the US dollar amid a softer greenback. During the early Asia trading hours and after the London open, the USD/INR exchange rate was seen quoted higher at 71.38, as Rupee give back some of its early gains.
Wednesday’s trade saw the USD/INR exchange rate fluctuate within the range of 71.35 – 71.10. The dollar index closed on Wednesday slightly higher settling at 98.40 registering a 0.15% gain.
Risk sentiment continues to improve after US President Donald Trump hinted that the world’s two most powerful economies in the world are close to reaching an agreement that could ease the trade war tensions. INR has enjoyed solid gains since the beginning of the week tracking the gains in the other emerging markets and from the domestic equity market. As US – China trade tensions ease further, we should expect this to be supportive of emerging market currencies.
In other news, the US economy expanded faster than anticipated, expanding by 2.1%, according to the data released by the Bureau of Labor Statistics on Wednesday. The US economic activity grows faster than the 1.9% Q2 reading. It appears that the Fed’s easing efforts are fruitful and it will ensure that the current growth peace will be sustained.
The domestic benchmark equity index NIFTY 50 inched higher closing near the new all-time high and settled at 12100, registering a modest 0.52% gain. During early Asia trading hours, NIFTY 50 recovered some of the early losses and was seen printing a new all-time high at 12144. The Indian 10-year government bond yield closed at 6.46 versus 6.47 previous closing prices.
USD/INR Technical Pattern
On the technical front, the USD/INR exchange rate continued to make more progress on the downside. If the bearish momentum gains more traction, the USD/INR can possible retest intraday support level 71.00.