Indian Rupee plunges the currency market reaching an 8 week low against the US Dollar. The USD/INR exchange rate settled 24 paise higher at 71.62 on Tuesday. During the early Asian trading hours, Rupee was seen trading slightly lower at 71.49 against the US dollar. Rupee is feeling the heat and it came under pressure for the most part of yesterday trading hours.
India’s largest public sector bank SBI slashed its economic growth forecast and it only sees a 4.2% growth in the second quarter. It seems this was enough to motivate currency traders to move away from the Indian Rupee.
India’s GDP slumped to 5% in the first quarter, the lowest figure seen in the past 6 years due to slower consumer demand and global economic slowdown.
India’s industrial production fell to 4.3%, the lowest level in 8 years, while on a quarterly basis, the factory output contracted by 0.4%.
The benchmark equity index NIFTY 50 traded higher during the Asia trading hours and was seen quote around a high of 11946. The Indian 10-year government bond yield has registered a loss of 0.43% being quoted around 6.533 percent.
The dollar index, which gauges the greenback’s strength against a basket of major currencies closed on Tuesday inside the previous trading range at 98.33.
On other news, Trump said on Tuesday that he will raise tariffs if the US — China trade deal doesn’t materialize.
“Since China’s entrance into the World Trade Organization in 2001, no one has manipulated better or taken advantage of the United States more… I will not say the word ‘cheated,’ but nobody’s cheated better than China, I will say that,” said the US President Donald Trump at the Economic Club of New York
While the Indian equity market was closed yesterday due to the Guru Nanak Jayanti holiday, investors have been very active on the currency market dumping the Indian Rupee on the back of the trade deal tensions and lower economic growth prospects.
USD/INR Technical Pattern
On the technical level, the USD/INR rate seems poised for more upside development as the bullish momentum is expected to prevail. The break above the October high established at 71.56 has potentially resurrected the long-term USD/INR bullish trend.