USD/INR: Rupee Strength Eroding as Dollar Rebounds

The US dollar rallied against most emerging market currencies including the India’s Rupee, which is struggling to regain its strength. At the foreign exchange market, the value of Rupee depreciated by 22 paise settling down -0.31% at 71.26 against the US dollar. However, the USD/INR exchange rate was seen trading on Thursday within a trading range of 71.04 and 71.39.

The INR couldn’t sustain the peace of strength following the revived risk appetite in the aftermath of the phase-one trade deal. According to a Reuter’s survey, investors have turned bullish on the India’s Rupee for the first time in more than five months.

Another Reuter’s poll revealed that the Reserve Bank of India RBI will refrain from cutting rates due to rising inflation concerns. Retail inflation in India rose to a six year high of 7.35% during the last month of 2019, blasting through the RBI’s upper band of 6%. The next big risk event for the INR is the Union Budget for the fiscal year that starts on April 1^st. Any future R BI rate cuts will be tied to the Modi’s government fiscal deficit goals.

The dollar index was seen trading higher amid improved US data and settled at 97.69, up 0.20% from the previous close.

Elsewhere, foreign institutional investors (FIIS) were net buyers of shares in the local equity market worth Rs 1352.13 crore; according to the National Stock Exchange of India data published at the end of Monday’s trading session. On the other hand, Domestic Institutional Investors (DIIs) were net sellers of equities worth Rs -984.56 crore.

The domestic benchmark equity index NIFTY 50 closed on a positive tone for the first time this week and settled up 0.61% at 12,180.35. However, during early Asia trading hours on Friday, NIFTY 50 followed through on the previous gains and was seen quoted at 12,224.40.

The Indian 10-year government bond yield was seen quoted at 6.60% in morning trade compared with its previous close of 6.60%.

At the currency market, one US dollar buys 71.21 Rupees, down -0.07% as of 7:55 AM UTC.

Currencylive.com is a news site only and not a currency trading platform.

Currencylive.com is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views.