India’s Rupee took a break against the greenback to consolidate and digest the recent losses. On the foreign exchange market, the value of Rupee depreciates by a modest 1 paise at the end of Wednesday and settled almost unchanged at 71.01 against the US dollar.
During the early Asia trading hours, the USD/INR exchange rate was seen quoted within a range of 71.12 — 70.88. The risk tone has returned to the market after the euphoric rally amid easing trade tensions. The Indian Rupee took a dive and erased completely all the gains post “phase one” trade agreement between the world’s two most powerful economies in the world.
Dollar index traded higher on Wednesday and settled at 97.38 versus 97.18 previous close. The US dollar move was motivated by upbeat industrial production numbers in the US.
Elsewhere, the Indian government is expected to cut its income tax rates for the 2020 budget in an effort to stimulate economic growth, official sources have said on Wednesday. India’s economic growth rate plunged to 4.5% from 7% a year ago, the slowest pace of growth in six years.
“We are discussing tinkering with … income tax rates so that more money is put in the people’s hands,” government official have said — citing Reuters.
The protest that has broken across India after the Prime Minister Narendra Modi promulgated the Citizenship Amendment Act, which prohibits undocumented Muslims immigrants to claim citizenship has failed to attract the market’s attention.
Looking forward over the economic calendar there are no major risk events that can disrupt the market volatility.
The domestic benchmark equity index NIFTY 50 reached a new all-time high on Wednesday as foreign investors have pumped $13.59 billion in the Indian equities. During early Asia trading hours NIFTY 50 was seen trading higher at 12,242. Year-to-date the Indian stock market has gained 12.71%, benefiting from foreign investment inflow.
The Indian 10-year government bond yield was seen quoted at 6.72% compared with its previous close of 6.71%.
