Indian Rupee on a firm note against the greenback tracking the gains in the equity market. On the interbank market, the USD/INR exchange rate is trading down for the second consecutive day settling 20 paise lower at 71.30. During the early Asia trading hours and after the London open, Rupee was seen quote further down at around 71.18 against the US dollar.
Tuesday’s trade saw USD/INR within the range of 71.52 — 71.30. The fundamental outlook for the Rupee which has underperformed against the US dollar since the beginning of the month is starting to improve. However, looking ahead over the economic calendar the Indian GDP figures scheduled to be released this Friday can limit INR gains.
According to the market consensus Indian economic activity in the third quarter is expected to slow down to 4.6% versus 5.0% prior reading. If the projection for the third quarter comes true, it will be the slowest growth pace since 2012. According to the Fitch group firm India Ratings and Research, the economic growth activity for the fiscal year 2020 is also gloomy. Fitch lowered the GDP from 6.1% to 5.6% for the fiscal year 2020.
In other news, on the US – China trade talk’s front, the market is turning again optimistic about the prospects of a preliminary trade deal agreement.
The domestic benchmark equity index NIFTY 50 inched lower after briefly gaped to a new all-time high and settled at 12037, registering a modest 0.30% loss. During early Asia trading hours, NIFTY 50 recovered some of the early losses and was seen quoted at 12108. The Indian 10-year government bond yield closed at 6.50 versus 6.48 previous closing prices.
The dollar index, which gauges the greenback’s strength against a basket of major currencies closed on Tuesday slightly lower settling at 98.23 registering a 0.06% loss.
USD/INR Technical Pattern
On the technical front, the USD/INR exchange rate managed to break out of a trading range established over the past few days. If the downside momentum gains more traction, the USD/INR can possible retest intraday support level 71.00.