USD/INR: Indian Rupee Give up Gains Against US Dollar

The Indian Rupee interrupted its 6 consecutive days of positive gains and has lost some ground against the US Dollar. There is a lack of macro catalysts and geopolitical uncertainties to motivate the USD/INR currency exchange rate. The natural ebb and flow of the market seems most responsible for the recent move.

The Indian Rupee closed at 70.732 against the greenback at the end of Thursday’s trading session. After the London opening session, the Indian Rupee was trading slightly higher at 70.684 against the US dollar. During the early Asia trading session, most emerging market currencies are posting losses against the greenback.

NIFTY 50 settled at 11582 registering a loss of 79 points on Thursday. However, the domestic equity market gapped higher during the Asia trading hours, but it failed to sustain the gains and it is currently trading down again at around 11575. The 10-year government bond yield was quoted at 6.50% during Asia trading hours.

From the other side of the monetary policy spectrum, the US economy saw its orders for durable goods falling by 1.1% in September, the largest setback in four months. Business investments contracted again, reflecting extensive dullness in the US manufacturing activity.

Foreign investors are waiting for the US Federal Reserve’s monetary policy review next week, before making any bets on the market direction. The Fed is expected to cut rates by another 0.25%, which will bring the target range for the funds rate down to 1.5% to 1.75%. Naturally, this should harm the US dollar.

The Federal Reserve is derelict in its duties if it doesn’t lower the Rate and even, ideally, stimulate. Take a look around the World at our competitors. Germany and others are actually GETTING PAID to borrow money. Fed was way too fast to raise, and way too slow to cut,” said the US President Donald Trump on Twitter

USD/INR Technical Pattern

The USD/INR exchange rate remains range-bound between the key support level 70.350 and key resistance level and round number 72.000. The market is still searching for a catalyst to motivate a break out of the current consolidation.

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