Indian Rupee gives back most of its profits and its sliding against the greenback after US President Donald Trump signs into law the bill that supports Hong Kong protesters. On the currency market, the Rupee depreciated by 25 paise settling at 71.36 (New York close based-price) against the US dollar.
During the early Asia trading hours and after the London open, the USD/INR exchange rate was seen quoted further higher at 71.59, as Rupee gives back all of its early gains.
Thursday’s trade saw the USD/INR exchange rate fluctuate within the range of 71.11 – 71.50. The dollar index, which gauges the greenback’s strength against a basket of major currencies closed on Thursday mostly unchanged from prior closing price settling at 98.36.
Risk sentiment has deteriorated following the US President Trump signing the Hong Kong bill, which can be a big hurdle in the ongoing trade talk between the world’s two most powerful economies. Chinese officials have reiterated that they are ready to take retaliatory measures against the USA.
In other news, currency traders are waiting for the India GDP data to be released later during the day. According to the market consensus, the data will show Modi’s government scrambling to revive the economy. The bad news for the Indian economy is that it’s expected to drop below the 5% mark for the first time in six years. Most economists only see a 4.7% growth for the third quarter of FY2019.
Despite the RBI’s efforts to reinvigorate its lackluster economy, Rupee remains one of the worst-performing emerging market currencies in Asia.
The domestic benchmark equity index NIFTY 50 inched higher closing near the new all-time high and settled at 12151, registering a modest 0.52% gain. During early Asia trading hours, NIFTY 50 sold off and was seen trading at a low of 12017. The Indian 10-year government bond yield closed at 6.48 versus 6.46 previous closing prices.
USD/INR Technical Pattern
On the technical front, the USD/INR exchange rate has resumed its long-term bullish trend and it’s now on track to challenge the previous week high established at 71.87.