Tag: India

  • USD/INR trades flat amid a softer US Dollar

    USD/INR trades flat amid a softer US Dollar


    • The Indian Rupee steadies in Tuesday’s Asian session. 
    • A weaker US Dollar and stronger Chinese Yuan could support the INR, but RBI rate cut bets might cap its upside. 
    • The US Conference Board’s Consumer Confidence report is due later on Tuesday. 

    The Indian Rupee (INR) flat lines on Tuesday after hitting a two-week high in the previous session. A broader gain in the Asian currencies on account of a weak US Dollar (USD) could provide some support to the Indian currency. Additionally, a decline in crude oil prices might contribute to the INR’s upside. It’s worth noting that India is the world’s third-largest oil consumer, and lower crude oil prices tend to have a positive impact on the INR value.

    Nonetheless, expectations of lower interest rates by the Reserve Bank of India (RBI) might weigh on the local currency. Traders brace for the US Conference Board’s Consumer Confidence report, which is due later on Tuesday. Also, Durable Goods Orders and the Dallas Fed Manufacturing Index will be released. The Minutes of the Federal Open Market Committee (FOMC) will be the highlight later on Wednesday. 

    Indian Rupee holds steady amid weakening of the US Dollar

    • “It’s a very EM positive environment, and I don’t see any reason why that will stop in the near term,” said Brad Bechtel, global head of foreign exchange at Jefferies. Bechtel emphasized that the US Dollar (USD) could face steeper losses if China allows the Yuan to start moving substantially higher.
    • The Monetary Policy Committee (MPC) of the RBI is likely to cut the repo rate by 25 basis points (bps) at the June meeting, according to  Moneycontrol’s poll of economists and bank treasury heads.
    • NITI Aayog Chief Executive Officer (CEO) BVR Subrahmanyam said that India has surpassed Japan to become the world’s fourth-largest economy, citing data from the International Monetary Fund (IMF). 
    • According to the CME FedWatch tool, the chances of an interest rate cut by the Federal Reserve (Fed) in June’s meeting are only at a low of 5.6%.  

    USD/INR retains the negative bias in the longer term

    The Indian Rupee trades on a flat note on the day. The bearish outlook of the USD/INR pair remains in place as the price is below the key 100-day Exponential Moving Average (EMA) on the daily chart. Furthermore, downward momentum is reinforced by the 14-day Relative Strength Index (RSI), which stands below the midline near 45.00.  This suggests that further downside looks favorable in the near term. 

    The first support level for USD/INR is located at 84.78, the low of May 26. Any follow-through selling below this level could set off a drop to 84.61, the low of May 12. The additional downside filter to watch is 84.05, the lower limit of the trend channel.

    In the bullish case, the 100-day EMA at 85.55 acts as an immediate resistance level for the pair. Sustained trading above the mentioned level possibly lifts USD/INR up to 85.75, the upper boundary of the trend channel. Further north, the next hurdle is seen at 85.10, the high of May 22. 

    Indian Rupee FAQs

    The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

    The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

    Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

    Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

     



    Source link

  • USD/INR remains stronger as Indian Rupee struggles on strong importer demand

    USD/INR remains stronger as Indian Rupee struggles on strong importer demand


    • The Indian Rupee continues to weaken amid renewed USD demand from importers and persistent foreign fund outflows.
    • USD/INR may face headwinds as the US Dollar comes under pressure following Moody’s downgrade of the US credit rating.
    • The INR finds some support from falling crude oil prices, driven by reports of progress in US-Iran nuclear talks.

    The Indian Rupee (INR) remains subdued against the US Dollar (USD) on Monday, continuing its losing streak for the sixth successive day. Moreover, fresh USD demand from importers and ongoing foreign fund outflows continue to weigh on the INR. 

    However, the upside of the USD/INR pair could be limited as the US Dollar (USD) came under renewed pressure following Moody’s Investors Service downgrade of the US credit rating by one notch, citing rising debt levels and mounting interest payment obligations.

    However, the INR receives support from a decline in crude oil prices, amid reports of progress in US-Iran nuclear negotiations, which could help cushion the Rupee’s downside. Iran’s president reaffirmed his country’s commitment to continue talks with the US while standing firm on its nuclear rights. Given that India is the world’s third-largest oil consumer, lower oil prices generally support the Rupee by easing the country’s import bill.

    Indian Rupee depreciates despite a weaker US Dollar 

    • The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading lower at around 100.80 at the time of writing. The US Dollar faces challenges as Moody’s Ratings has downgraded the US credit rating from Aaa to Aa1, aligning with previous downgrades by Fitch Ratings in 2023 and Standard & Poor’s in 2011.
    • Moody’s now forecasts US federal debt to rise to approximately 134% of GDP by 2035, up from 98% in 2023. The federal deficit is projected to widen to nearly 9% of GDP, fueled by mounting debt-servicing costs, increased entitlement spending, and declining tax revenues.
    • A series of weak US economic indicators has reinforced expectations of rate cuts by the Federal Reserve later this year. Notably, the University of Michigan’s Consumer Sentiment Index fell sharply to 50.8 in May from 52.2 in April, the lowest level since June 2022 and the fifth consecutive monthly decline. Analysts had forecast a rise to 53.4.
    • The US Dollar may find some support from easing global trade tensions. A preliminary trade deal between the US and China proposes significant tariff reductions—Washington is set to lower duties on Chinese goods from 145% to 30%, while Beijing will cut tariffs on US imports from 125% to 10%.
    • Market sentiment is also lifted by renewed optimism over a potential US-Iran nuclear deal and upcoming talks between US President Donald Trump and Russian President Vladimir Putin aimed at de-escalating the Ukraine conflict.
    • India’s BSE Sensex rose 3.6% last week, rebounding from the previous week’s decline. The rally was fueled by easing geopolitical tensions between India and Pakistan, growing optimism around India–US trade ties, and expectations of domestic interest rate cuts.
    • Meanwhile, a high-level Indian delegation led by Minister of Commerce and Industry Piyush Goyal is set to meet with US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick during his visit, which continues through May 20. Goyal is expected to push forward discussions on a proposed India–US bilateral trade agreement.

    USD/INR rises above 85.50 amid a mixed-to-bullish bias 

    The Indian Rupee continues its losing streak for the sixth consecutive day, with the USD/INR pair trading near 85.60 on Monday. Technical indicators on the daily chart maintain a bullish bias, as the pair moves upwards within an ascending channel pattern. Additionally, the 14-day Relative Strength Index (RSI) remains above the 50 level, suggesting a persistent bullish sentiment.

    The USD/INR pair could target its monthly high of 85.90, reached on May 9. A break above this level could allow the pair to explore the region around the upper boundary of the ascending channel at 86.40.

    Immediate support lies at the nine-day Exponential Moving Average (EMA) around 85.30, followed by the ascending channel’s lower boundary at 85.10. A decisive break below this zone could undermine short-term bullish attempts and open the door for a decline toward its eight-month low of 83.76.

    Risk sentiment FAQs

    In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

    Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

    The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

    The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.



    Source link

  • USD/INR softens ahead of US Retail Sales, PPI releases

    USD/INR softens ahead of US Retail Sales, PPI releases


    • Indian Rupee posts modest gains in Thursday’s Asian session.
    • Optimism from the US-China trade deal underpins the US Dollar and drags the INR lower. 
    • Traders brace for the US April Retail Sales and PPI data, due later on Thursday.

    The Indian Rupee (INR) strengthens on Thursday. The de-escalation of a trade war between the United States (US) and China, along with the fall in Crude oil prices and the weakness of the US Dollar (USD), provides some support to the Indian currency. 

    However, the cooler-than-expected India’s retail inflation, which dropped to its lowest level since July 2019, might exert some selling pressure on the INR, as it could give the Reserve Bank of India (RBI) another chance to cut rates next month in its scheduled meeting. 

    Looking ahead, traders await the release of top-tier US economic data due later on Thursday, including Retail Sales and Producer Price Index (PPI) for April. The Federal Reserve (Fed) Chair Jerome Powell is scheduled to speak later on the same day. 

    Indian Rupee remains firm despite softer retail inflation report

    • India’s Wholesale Price Inflation (WPI) fell to a 13-month low of 0.85% in April from 2.05% in March, according to the Commerce and Industry Ministry on Wednesday. This figure came in below the market consensus of 1.76%. 
    • “Positive rate of inflation in April, 2025 is primarily due to an increase in prices of manufacture of food products, other manufacturing, chemicals and chemical products, manufacture of other transport equipment, and manufacture of machinery and equipment, etc,” noted the Industry Ministry.
    • San Francisco Fed President Mary Daly said late Wednesday that the strength of the US economy allows policymakers to be patient as they wait for more evidence of how Trump’s policies will affect businesses and households. 
    • Markets have dialed back expectations for rate cuts from the Fed this year, pricing in a 74% chance of the first cut of at least 25 basis points (bps) at the September meeting, according to LSEG data, compared with the prior view for a cut in July.

    USD/INR retains a bearish bias in the longer term

    The Indian Rupee trades stronger on the day. The bearish tone of the USD/INR pair remains in place, with the price holding below the key 100-day Exponential Moving Average (EMA) on the daily chart. Nonetheless, further consolidation or temporary recovery cannot be ruled out as the 14-day Relative Strength Index (RSI) hovers around the midline, indicating neutral momentum in the near term. 

    The first downside target for USD/INR is seen at 84.95, the low of April 28. Any follow-through selling below the mentioned level could see a slide toward 84.61, the low of May 12. The next contention level to watch is 84.12, the low of May 5.

    On the other hand, the immediate resistance level for the pair is located at 85.60, the 100-day EMA. A break above this level might even spark a run toward the 86.00-86.05 zone, which marks both a round figure and the upper boundary of the trend channel. 

    Indian Rupee FAQs

    The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

    The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

    Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

    Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.



    Source link

  • USD/INR trades flat amid a softer US Dollar

    USD/INR surges as India-Pakistan conflict takes an ugly turn


    • USD/INR lurched to one of its biggest single-day moves in recent history.
    • Tensions are rising rapidly between India and Pakistan as military action spins up.
    • The two regions have been caught in multiple conflicts over the Kashmir region over the years.

    USD/INR surged to fresh highs on Thursday, bolstered by a fresh pummeling of the Indian Rupee (INR). India and Pakistan are spooling up a direct military conflict as the two countries continue to lay competing claims over the Kashmir region. A recent attack on civilians in India-controlled Kashmir last month has sparked a harsh response, despite repeated denials from Pakistan that the attack was sponsored or supported by the Pakistan government.

    India and Pakistan each control sections of Kashmir, but both sides have laid full claim over the entirety of the region, and have fought at least three direct wars over the territory in the past. The latest uptick in military tensions is beginning to spread geopolitical tensions across the wider region. Both countries are nuclear-capable powers, and each country has launched escalating attacks in the latest conflict.

    Geopolitical tensions on the rise amid escalating military strikes

    Pakistan noted that India’s latest counter-attack hit several densely-populated areas within neighboring Punjab, and Pakistan has vowed to become “more assertive” in responding to Indian-led military strikes. The Indian Rupee is poised to shed 1.5% in a single day of trading as escalating wartime tensions begin to weigh on the region. The Sensex Index, a market-weighted stock index of 30 well-established equities listed on the Bombay Stock Exchange, tumbled over 400 points early Thursday, with losses concentrated in bank stocks, automotive shares, and fast-moving consumer goods (FMCG) equities.

    USD/INR technical forecast

    Despite steep intraday losses weighing on the Indian Rupee, USD/INR is still trading into familiar near-term chart territory. The pair is on pace for its largest single-day gain since late 2019 as the Greenback gains ground on the Rupee, and a sharp reversal of recent bearish momentum has pushed the pair back above its 200-day Exponential Moving Average (EMA) near 85.25.

    USD/INR has climbed nearly 1.5% on Thursday, tapping a multi-week high north of 86.00.

    USD/INR daily chart

    Indian Rupee FAQs

    The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

    The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

    Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

    Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.



    Source link

  • Thaw in US-China Tensions With Geneva Talk Scheduled, But Markets Stay Guarded Before FOMC

    Thaw in US-China Tensions With Geneva Talk Scheduled, But Markets Stay Guarded Before FOMC


    Positive developments out of Asia offered some encouragement to global investors today, though market responses remained muted. China unveiled a wide-ranging stimulus package, cutting both its seven-day reverse repo rate and the reserve requirement ratio to inject liquidity to stabilize the economy. In parallel, officials from the US and China announced plans to hold a key meeting in Geneva this Saturday, in what could mark the first serious effort to thaw trade relations since US President Donald Trump’s latest round of steep tariffs.

    Despite these encouraging headlines, equity markets across Asia posted only modest gains. Currency markets showed slightly more reaction, with Kiwi outperforming after Q1 unemployment rate came in steady. Aussie and Loonie also posted small gains. Dollar is holding firmer ahead of Fed’s decision later today. Meanwhile, Yen softened, paring gains from earlier in the week. Euro is staying on the softer side. Political risk in Europe remains elevated even after Germany’s new chancellor Friedrich Merz finally secured parliamentary backing. Swiss Franc is positioning in the middle along Sterling.

    On the trade front, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet China’s top economic planner He Lifeng in Switzerland, with both sides signalling willingness to engage. Bessent stated that current tariff levels, reaching as high as 145% on Chinese imports, amount to “an embargo.” He reiterated that the US seeks “fair trade, not decoupling.” China’s official statement echoed this sentiment, saying the re-engagement decision balances “global expectations,” “China’s interests,” and the needs of “US industry and consumers.”

    Canadian Prime Minister Mark Carney met with Trump overnight in what he termed a “constructive” first step toward reshaping North American trade relations. Meanwhile, the UK and India announced a new agreement that will see most goods traded become tariff-free within a decade, marking a notable milestone for the Starmer government.

    Technically, immediate focus in NZD/USD is on 0.6028 resistance. Firm break there will resume rise from 0.5484. Next target is 61.8% projection of 0.5484 to 0.6028 from 0.5892 at 0.6228. Rejection by 0.6028 will extend the consolidation pattern from there with another falling leg. But downside should be contained by 38.2% retracement of 0.5484 to 0.6028 at 0.5820 in this case.

    In Asia, at the time of writing, Nikkei is up 0.06%. Hong Kong HSI is up 0.49%. China Shanghai SSE is up 0.64%. Singapore Strait Times is up 0.07%. Japan 10-year JGB yield is up 0.016 at 1.278. Overnight, DOW fell -0.95%. S&P 500 fell -0.77%. NASDAQ fell -0.87%. 10-year yield fell -0.035 to 4.308.

    Looking ahead,Germany factory orders, France trade balance, Swiss foreign curreny reserves, UK PMI construction and Eurozone retail sales will be released in European session. Later in the day, main focus in on FOMC rate decision and press conference.

    Fed to holds fire as markets look to July for next cut

    Fed is widely expected to leave its benchmark interest rate unchanged at 4.25–4.50% today. With no update to its economic projections or dot plot this time, attention will turn squarely to the post-meeting statement and Chair Jerome Powell’s press conference.

    The prevailing message is likely to be one of patience, as policymakers face mounting uncertainties tied to the unresolved tariff war and its eventual economic impact.

    Central to Fed’s wait-and-see approach is the need for clarity on two fronts: whether US President Donald Trump’s reciprocal tariffs are fully enacted, and how inflation expectations evolve in response. These factors, especially in light of ongoing geopolitical and trade risks, argue against any near-term policy moves.

    As such, June is seen as too soon for a shift, with the expected to remain on hold until more definitive clarity emerge, probably not until the tariff ceasefire expires in early July.

    Market pricing reflects this outlook top. Fed funds futures assign just a 32% chance of a cut in June, but expectations firm up thereafter, with roughly 75% probability of three 25 bps cuts by year-end, bringing rates down to 3.50–3.75%.

    Japan’s PMI composite finalized at 51.2, input inflation jumps to 2-year high

    Japan’s private sector returned to expansion in April, as the final PMI Composite rose to 51.2 from March’s 48.9. The improvement was driven entirely by the services sector, with its PMI climbing to 52.4, while manufacturing remained in contraction.

    According to S&P Global’s Annabel Fiddes, stronger services activity helped offset the drag from factories, where new orders fell sharply in response to the global tariff environment.

    While services firms reported stronger demand, confidence among both services and manufacturing sectors deteriorated. Businesses expressed concern about the broader global outlook and the negative implications of recent US tariff moves on growth potential.

    Adding to the pressure, input price inflation accelerated to a two-year high, prompting firms to raise selling prices to protect margins.

    NZ employment grow 0.1% in Q1, wages growth cool

    New Zealand’s employment grew just 0.1% qoq as expected, while the unemployment rate held steady at 5.1%, better than forecast of 5.3%.

    However, the quality of employment deteriorated, with a notable shift from full-time to part-time roles. Over the year, full-time employment dropped by -45k while part-time roles increased by 25k.

    Participation rate edged down to 70.8% and the employment rate slipped to 67.2%, both suggesting a gradual loss in labor market momentum.

    Wage growth also moderated, with the labour cost index rising 2.9% annually, down from 3.3% in the previous quarter.

    PBoC unleashes broad-based monetary easing including rate and RRR cuts

    China’s central bank has announced a sweeping set of monetary policy measures to support its economy, starting with a 10bps cut in the seven-day reverse repo rate to 1.40%, effective May 8. In a more aggressive move, the PBoC will also slash the reserve requirement ratio by 50bps, releasing approximately CNY 1T into the banking system.

    The new package is structured into three categories: quantitative, price-based, and structural tools. The quantitative arm focuses on long-term liquidity via the RRR cut. The price-based measures involve lowering benchmark and structural policy rates. The structural component aims to channel credit into strategic areas such as technological innovation, consumption, and inclusive finance.

    EUR/USD Daily Outlook

    Daily Pivots: (S1) 1.1306; (P) 1.1344; (R1) 1.1407; More…

    Intraday bias in EUR/USD remains neutral for the moment as range trading continues above 1.1265. On the downside, below 1.1265 will resume the corrective fall from 1.1572 short term top. But downside should be contained by 38.2% retracement of 1.0176 to 1.1572 at 1.1039. On the upside, break of 1.1424 will suggest that the correction has completed and bring retest of 1.1572 high.

    In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 55 W EMA (now at 1.0808) holds.

    Economic Indicators Update

    GMT CCY EVENTS ACT F/C PP REV
    22:45 NZD Employment Change Q1 0.10% 0.10% -0.10% -0.20%
    22:45 NZD Unemployment Rate Q1 5.10% 5.30% 5.10%
    22:45 NZD Labour Cost Index Q/Q Q1 0.40% 0.50% 0.60%
    00:30 JPY Services PMI Apr F 52.4 52.2 50
    06:00 EUR Germany Factory Orders M/M Mar 1.10% 0.00%
    07:00 CHF Foreign Currency Reserves (CHF) Apr 726B
    08:30 GBP Construction PMI Apr 46 46.4
    09:00 EUR Eurozone Retail Sales M/M Mar -0.10% 0.30%
    14:30 USD Crude Oil Inventories -1.7M -2.7M
    18:00 USD Fed Interest Rate Decision 4.50% 4.50%
    18:30 USD FOMC Press Conference

     



    Source link

  • India Industrial Output Growth Improves To 3.0%

    India Industrial Output Growth Improves To 3.0%


    India’s industrial production growth accelerated slightly in March, data from the Ministry of Statistics and Programme Implementation showed Monday.

    Industrial production rose 3.0 percent year-over-year in March, faster than the revised 2.7 percent growth in February. The expected increase was 3.3 percent.

    The overall growth in March was mainly due to the developments in the manufacturing and electricity segments.

    The annual growth in manufacturing accelerated to 3.0 percent from 2.8 percent. Data showed that electricity output growth quickened to 6.3 percent from 3.6 percent.

    Meanwhile, mining output grew at a slower pace of 0.4 percent annually in March versus a 1.6 percent increase in February.

    From April to March, industrial production posted an annual growth of 4.0 percent compared to a 5.9 percent rise in the same period last year.

    For comments and feedback contact: editorial@rttnews.com

    Economic News

    What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.





    Source link

  • USD/INR softens ahead of US Retail Sales, PPI releases

    USD/INR flat lines as India-Pakistan tensions rise in Kashmir


    • Indian Rupee steadies in Monday’s Asian session. 
    • Concerns over geopolitical tensions between India and Pakistan weigh on the Indian Rupee. 
    • Rising foreign inflows and lower crude oil prices might help limit the INR’s losses. 

    The Indian Rupee (INR) holds steady on Monday. Rising tension with Pakistan could trigger a risk-off sentiment among traders, which might drag the Indian currency lower. The ceasefire violation along the Line of Control (LoC) came days after the Pahalgam terror attack, which killed 26 people, mostly tourists, in the Baisaran valley near Pahalgam, Jammu and Kashmir. 

    On the other hand, Foreign Portfolio Investors (FPIs) continued to buy Indian equities for the seventh consecutive day. This, in turn, might boost the local currency against the Greenback in the near term. Furthermore, the decline in Crude oil prices might contribute to the INR’s upside, as India is the third largest consumer of crude oil in the world. 

    The US Dallas Fed Manufacturing Business Index for April will be published later on Monday. The preliminary reading of US Gross Domestic Product (GDP) for the first quarter (Q1) will be in the spotlight on Wednesday ahead of the US Nonfarm Payrolls (NFP) report, which is due later on Friday. 

    Indian Rupee trades flat amid India-Pakistan tensions

    • Tensions between India and Pakistan are rising after Pakistan violated a ceasefire across the LoC after the Pahalgam terror attack. On Thursday night, hours after suspending the Simla Agreement of 1971, the Pakistan Army breached the truce along the LoC and began firing at various sites. The Indian Army has responded “effectively.”
    •  The Reserve Bank of India is expected to cut the Repo Rate to 5.50% by end-Q3 (vs. 5.75% in March poll), according to the Reuters poll.
    • US Agriculture Secretary Brooke Rollins said on Sunday that the Trump administration is having daily conversations with China over tariffs, per Reuters. Rollins added that there were ongoing talks between the two nations and that trade deals with other nations were “very close.”
      US President Donald Trump said on Friday that the US will be reasonable on tariffs, adding that markets are adjusting to tariff policy.  
    • The University of Michigan (UoM) Consumer Sentiment in April rose to 52.2 from 50.8 in the previous reading, better than the estimation of 50.8. Consumers’ inflation expectations for one year eased to 6.5% in April versus 6.7% prior.  

    USD/INR’s outlook remains bearish under the 100-day EMA

    The Indian Rupee trades flat on the day. The negative outlook of the USD/INR pair remains intact, characterized by the price holding below the key 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI) stands below the midline near 41.00, supporting the sellers in the near term. 

    The lower limit of the descending trend channel at 84.80 acts as an initial support level for USD/INR. Extended losses could see a drop to 84.22, the low of November 25, 2024. Further south, the additional downside filter to watch is 84.08, the low of November 6, 2024.

    In the bullish case, the first upside barrier is located at 85.80, the 100-day EMA. If the pair breaks above this level, it could draw in more bullish pressure and push the pair toward 86.35, the upper boundary of the trend channel. 

     



    Source link

  • India Bank Loan Growth remains unchanged at 11% in March 31



    India Bank Loan Growth remains unchanged at 11% in March 31



    Source link

  • USD/INR trades flat amid a softer US Dollar

    USD/INR softens ahead of US Retail Sales release, Fed’s Powell speech


    • The Indian Rupee gathers strength in Wednesday’s Asian session. 
    • The softer US Dollar and lower crude oil prices continue to underpin the INR. 
    • The US March Retail Sales report and speech by Fed Chair Powell will be the highlights later on Wednesday. 

    The Indian Rupee (INR) trades in positive territory for the fifth consecutive day on Wednesday. The weakening of the US Dollar (USD) and the extended decline in crude oil prices eased the Indian currency’s losses. It’s worth noting that India is the world’s third-largest oil consumer, and lower crude oil prices tend to have a positive impact on the Indian currency value.

    On the other hand, US President Donald Trump said on Monday that he was considering temporary exemptions to tariffs on imported vehicles and parts to allow automakers additional time to establish manufacturing operations in the US. Nonetheless, tensions between the US and China are escalating, which might weigh on the Asian currencies, including the INR. 

    Looking ahead, investors will keep an eye on the US March Retail Sales later on Wednesday, which is expected to rise 1.3% MoM in March. Also, the speech of Federal Reserve (Fed) Chair Jerome Powell will be in the spotlight. 

    Indian Rupee drifts higher on a weaker US Dollar

    • Indian stocks climbed as trading resumed after an extended weekend, with the benchmark indices recovering all losses sparked by Trump’s reciprocal tariffs earlier this month. The nation’s big domestic economy is seen able to withstand a potential global recession better than many peers, who face higher tariffs.
    • The Reserve Bank of India (RBI) will buy bonds worth 400 billion rupees ($4.67 billion) and will also conduct a 43-day repo for 1.50 trillion rupees on Thursday, per Reuters.  
    • India’s Consumer Price Index (CPI) rose by 3.34% YoY in March, compared to 3.61% in February, according to the Ministry of Statistics and Programme Implementation. This reading came in softer than the 3.60% expected.  
    • Fed Governor Christopher Waller said on Monday that the Trump administration’s tariff policies were a major shock to the US economy that could lead the central bank to cut rates to head off recession even if inflation remained high. 
    • Atlanta Fed Bank President Raphael Bostic said that the uncertainty surrounding the Trump administration’s tariff and other policies has put the economy into a “big pause,” and he suggested that the Fed bank should stay on hold until there is more clarity.
    • The markets are now pricing in nearly 85 basis points (bps) worth of monetary policy easing by the end of the year, with most expecting the Fed to hold rates next month, according to the CME FedWatch tool. 

    USD/INR resumes its downside journey below the 100-day EMA

    The Indian Rupee trades stronger on the day. The USD/INR pair resumes its downside as the pair crosses below the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The downward momentum is supported by the 14-day Relative Strength Index (RSI), which stands below the midline near 42.60, indicating the longer-term bearish bias isn’t completely over yet.

    The initial support level for USD/INR is located at 85.48, the low of March 24. Further south, the next contention level to watch is 85.20, the low of April 3, followed by 84.95, the low of April 3. 

    In the bullish case, the 85.90-86.00 zone acts as an immediate resistance level for the pair, representing the 100-day EMA and the psychological level. Bullish candlesticks and consistent trading above the mentioned level could see a rally to 86.61, the high of April 10. 



    Source link

  • India FX Reserves, USD up to $676.27B in March 31 from previous $665.4B




    Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

    If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

    FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

    The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.



    Source link

  • RBI Shifts Stance To Accommodative As Tariffs Loom

    RBI Shifts Stance To Accommodative As Tariffs Loom


    The Reserve Bank of India cut its key policy rates for the second straight meeting and also shifted its monetary policy stance to accommodative as trade tariffs pose risks to the outlook for both inflation and growth.

    At the first policy meeting of the financial year, the Monetary Policy Committee, led by RBI Governor Sanjay Malhotra, unanimously decided to cut the policy repo rate by 25 basis points to 6.00 percent, with immediate effect.

    The Indian central bank had previously lowered its policy rate by 25 basis points in February, which was the first reduction since May 2020.

    The MPC also decided to change the stance from neutral to accommodative. Policymakers observed that rapidly evolving situation requires continuous monitoring and assessment of the economic outlook.

    Governor Malhotra said going forward, in the absence of any shocks, the MPC is considering only two options – status quo or a rate cut.

    Policymakers observed that the recent trade tariff related measures exacerbated uncertainties clouding the economic outlook across regions and pose new headwinds for global growth and inflation.

    The U.S. administration’s 26 percent tariffs on imports from India take effect on Wednesday. Although pharmaceuticals were exempted from reciprocal tariffs earlier, President Donald Trump said a major tariff on pharma imports is set to be announced soon.

    The current challenging global economic conditions, the benign inflation outlook and moderate growth, demand that the committee continues to support growth, Malhotra said.

    Citing the impact of global trade and policy uncertainties, the bank downgraded economic growth outlook for the financial year 2025-26 to 6.5 percent from 6.7 percent.

    The MPC observed a decisive improvement in the inflation outlook and expressed greater confidence of a durable alignment of headline inflation with the target of 4 percent over a 12-month horizon.

    Inflation projection for the current financial year was lowered to 4.0 percent from 4.2 percent.

    With uncertainty over trade tariffs of the U.S. administration set to rumble on and inflation looking contained, further rate cuts are likely, Capital Economics economist Shilan Shah said.

    The shift in the monetary policy stance supports the view that interest rates will fall further than most expect, Shah noted. The repo rate will drop to 5.50 percent this year, the economist added.

    For comments and feedback contact: editorial@rttnews.com

    Economic News

    What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.





    Source link

  • USD/INR trades flat amid a softer US Dollar

    USD/INR strengthens ahead of US PCE inflation data


    • The Indian Rupee softens in Friday’s Asian session. 
    • Month-end US Dollar demand, fears of a global trade war and higher oil prices weigh on the INR. 
    • The US February PCE inflation data will take center stage later on Friday. 

    The Indian Rupee (INR) remains weak on Friday, pressured by month-end US Dollar (USD) demand from importers. US President Donald Trump late on Wednesday announced a 25% tariff on automotive imports, set to take effect on April 2. This, in turn, lifts the Greenback and undermines the Indian currency. Rising crude oil prices also contribute to the INR’s downside as India is the world’s third-largest oil consumer.   

    However, positive domestic markets and foreign fund inflows might help limit the local currency’s losses. Investors will keep an eye on the US February Personal Consumption Expenditures (PCE) data, which is due later on Friday. This report could offer some hints about the trajectory for further rate cuts after the Federal Reserve’s (Fed) decision last week to hold its benchmark interest rate steady.

    Indian Rupee weakens amid month-end US Dollar demand 

    • The Indian economy is estimated to achieve a growth of 6.5% in FY25 despite considerable external headwinds, according to the Department of Economic Affairs (DEA), Ministry of Finance.
    • Trump’s threat to impose 25% tariffs on all goods entering the US from countries importing Venezuelan gas or oil, brandished on Monday, could have disastrous consequences for the Indian economy, per Le Monde. 
    • Trump said that tariffs will likely be more “lenient than reciprocal,” as next week’s tariff deadline looms for a number of levies to go into effect.
    • The US economy expanded at an annual 2.4% pace in the final three months of 2024, the third release of the figures from the Bureau of Economic Analysis showed Thursday.  This figure came in slightly better than the previous estimate of fourth-quarter growth. 

    USD/INR paints a negative picture under the 100-day EMA

    The Indian Rupee trades in negative territory on the day. The negative view of the USD/INR pair remains in play, with the price being capped below the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The downward momentum is reinforced by the 14-day Relative Strength Index (RSI), which stands below the midline near 31.0, suggesting that further downside looks favorable. 

    The first downside target for USD/INR is located at 85.56, the low of March 26. If bearish momentum builds below this level, it could trigger more selling and drag the pair down toward 84.84, the low of December 19, followed by 84.22, the low of November 25, 2024. 

    On the other hand, the crucial upside barrier to watch is in the 85.90-86.00 zone, representing the 100-day EMA and the psychological level. A strong move above the mentioned level might even pave the way for a run at 86.48, the low of February 21, en route to 87.00, the round figure. 

    Indian Rupee FAQs

    The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.

    The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.

    Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.

    Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.

     



    Source link

  • USD/INR holds losses as Indian Rupee receives support from potential foreign inflows

    USD/INR holds losses as Indian Rupee receives support from potential foreign inflows


    • The Indian Rupee remains stable, with USD/INR hovering near a seven-week low of 86.20. 
    • The INR faces potential headwinds from rising crude Oil prices amid ongoing geopolitical tensions in the Middle East.
    • The US Dollar strengthens as risk aversion rises due to concerns over tariff policies.

    The Indian Rupee (INR) remains stable against the US Dollar (USD) during the Asian trading hours on Friday, with USD/INR holding near a seven-week low of 86.20, recorded on Thursday. However, further downside of the pair may be limited as the Greenback gains strength amid rising risk aversion driven by concerns over US tariff policies.

    The INR also faces potential headwinds from rising crude Oil prices amid ongoing geopolitical tensions in the Middle East, as India, the world’s third-largest Oil consumer, remains sensitive to energy costs. Israel has launched a new ground operation in Gaza, breaking a two-month ceasefire, while the US continues airstrikes against Iran-backed Houthi rebels in Yemen.

    Indian equities gained as Foreign Portfolio Investors (FPI) turned buyers in two of the past four sessions, according to provisional data. Market participants are closely monitoring investor flows ahead of the FTSE March semi-annual review later today, with IIFL projecting net inflows of $1.4 billion into Indian markets.

    Tech stocks led the rally, mirroring gains in US markets, while banking stocks maintained their upward momentum this month, supported by slower inflation, which has allowed the Reserve Bank of India (RBI) to adopt a more accommodative stance toward the Indian Rupee.

    The RBI recently implemented its first rate cut in nearly five years, aligning with market expectations. With liquidity concerns persisting in the Indian financial system, the central bank is expected to continue easing to support growth. India’s GDP expanded by 6.5% in the current financial year, down from 8.2% in the previous period.

    Indian Rupee could appreciate as US Dollar may struggle amid declining bond yields

    • The US Dollar Index (DXY), which measures the USD against six major currencies, is trading higher near 103.90. However, the US Dollar may face challenges as US bond yields decline, with investors seeking safety in Treasuries amid economic uncertainties.
    • Federal Reserve (Fed) Chair Jerome Powell downplayed the inflationary impact of tariffs, calling it temporary, but acknowledged the challenges in assessing broader effects. While recession risks have risen, Powell suggested they remain relatively low for now.
    • US Initial Jobless Claims increased to 223K for the week ending March 15, slightly missing estimates of 224K and exceeding the previous week’s revised figure of 221K (from 220K). Additionally, the Philadelphia Fed Manufacturing Survey for March eased to 12.5 MoM, down from February’s 18.1. This marked the second consecutive monthly decline, though the drop was less severe than the expected 8.5.
    • US President Donald Trump urged the Federal Reserve (Fed) to lower interest rates, citing the economic impact of tariffs. Trump posted on the Truth Social platform that the Fed would be better off cutting interest rates as US tariffs begin to take effect in the economy. He added, “Do the right thing,” “April 2nd is Liberation Day in America!”
    • The Reserve Bank of India has likely been “opportunistically” absorbing USD inflows in recent sessions, possibly to rebuild foreign exchange reserves used to support the INR in recent months, according to reports.
    • The yield on the 10-year Indian G-Sec dropped to 6.68%, its lowest level in three years, as expectations of lower interest rates grew. The RBI recently implemented its first rate cut in over four years, with lower-than-expected inflation in February reinforcing prospects for further easing this year.

    Technical Analysis: USD/INR could test nine-week lows near 86.00

    The Indian Rupee (INR) remains stable, with the USD/INR pair trading around 86.30 during Asian hours on Friday. Technical analysis of the daily chart suggests a strengthening bearish bias, as the pair remains within a descending channel pattern. Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly above the 30 mark, reinforcing the bearish outlook. A break below 30 could indicate an oversold condition, potentially triggering an upward correction.

    The USD/INR pair could find immediate support at a nine-week low of 86.14 level, recorded on January 13, followed by the lower boundary of the descending channel near the psychological level of 86.00 level.

    On the upside, the nine-day Exponential Moving Average (EMA) at 86.57 could act as the initial barrier. A break above this level could improve the short-term price momentum and support the USD/INR pair to explore the area around the descending channel’s upper boundary near the 87.10 level.

    USD/INR: Daily Chart

     



    Source link

  • USD/INR edges lower ahead of Indian WPI inflation data

    USD/INR edges lower ahead of Indian WPI inflation data


    • The Indian Rupee gains traction in Monday’s Asian session. 
    • The weaker US Dollar broadly supports the INR, but higher crude oil prices might cap its gains. 
    • Investors brace for India’s February WPI inflation and US Retail Sales data, which are due later on Monday. 

    The Indian Rupee (INR) strengthens on Monday. The concerns about slowing growth in the US economy from US President Donald Trump administration’s trade policies weigh on the Greenback and provide some support to the INR. Nonetheless, the upside for the local currency might be limited amid a rise in crude oil prices. It’s worth noting that India is the world’s third-largest oil consumer and higher crude oil prices tend to have a negative impact on the INR value. 

    Looking ahead, India’s February Wholesale Price Index (WPI) inflation will be released later on Monday. On the US docket, Retail Sales data for February will offer cues on US consumer sentiment and whether policy uncertainty has prompted a slowdown in spending. Investors will closely watch the US Federal Reserve (Fed) interest rate decision on Wednesday, which is expected to keep interest rates unchanged. The primary focus will be on the Fed’s policy guidance.

    Indian Rupee gathers strength amid multiple headwinds

    • The Indian Rupee is likely to face strong resistance around 86.50 while finding support in the 87.40-50 zone, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities.
    • India’s economic indicators for February reflect a moderation in inflation, improved industrial output and strong corporate earnings, according to the latest SBI Ecowrap report.  
    • India is projected to be the world’s third-largest economy by 2028 as it becomes the world’s most sought-after consumer market and gains share in global output, driven by macro stability influenced policy and better infrastructure, said Morgan Stanley. 
    • The preliminary reading of the University of Michigan (UoM) Consumer Sentiment Index showed that the index reached its lowest since November 2022, falling to 57.9 from 64.7 in the previous reading. This reading came in below the market consensus of 63.1.
    • The UoM five-year Consumer Inflation Expectation jumped to 3.9% in March, compared to 3.5% in February.
    • Markets widely expect the Fed will stay on hold when it concludes its two-day meeting on Wednesday. The markets have priced in nearly a 75% odds of a quarter-point reduction to the policy rate by June, according to the CME FedWatch tool. 

    USD/INR remains capped within a symmetrical triangle

    The Indian Rupee trades stronger on the day. The USD/INR pair has consolidated near the lower limit of a symmetrical triangle on the daily chart. The constructive view of the pair remains in place, with the price holding above the key 100-day Exponential Moving Average (EMA). However, further consolidation cannot be ruled out as the 14-day Relative Strength Index (RSI) stands above the midline, suggesting neutral momentum in the near term. 

    The immediate resistance level for USD/INR emerges at 87.24, the upper boundary of a symmetrical triangle. Sustained gain above this level could pave the way to 87.53, the high of February 28, en route to an all-time high of 88.00. 

    On the flip side, a decisive break below the low of March 6 and the lower limit of the triangle pattern at 86.86 could expose 86.48, the low of February 21. Further south, the additional downside filter to watch is 86.14, the low of January 27. 

    RBI FAQs

    The role of the Reserve Bank of India (RBI), in its own words, is “..to maintain price stability while keeping in mind the objective of growth.” This involves maintaining the inflation rate at a stable 4% level primarily using the tool of interest rates. The RBI also maintains the exchange rate at a level that will not cause excess volatility and problems for exporters and importers, since India’s economy is heavily reliant on foreign trade, especially Oil.

    The RBI formally meets at six bi-monthly meetings a year to discuss its monetary policy and, if necessary, adjust interest rates. When inflation is too high (above its 4% target), the RBI will normally raise interest rates to deter borrowing and spending, which can support the Rupee (INR). If inflation falls too far below target, the RBI might cut rates to encourage more lending, which can be negative for INR.

    Due to the importance of trade to the economy, the Reserve Bank of India (RBI) actively intervenes in FX markets to maintain the exchange rate within a limited range. It does this to ensure Indian importers and exporters are not exposed to unnecessary currency risk during periods of FX volatility. The RBI buys and sells Rupees in the spot market at key levels, and uses derivatives to hedge its positions.

     



    Source link

  • India Industrial Output Growth Improves To 3.0%

    India Manufacturing Growth Slowest In 14 Months


    India’s manufacturing activity continued to expand strongly in February, though at the weakest pace in more than a year, data compiled by S&P Global showed on Monday.

    The HSBC final manufacturing Purchasing Managers’ Index dropped to 56.3 in February from 57.7 in January. The flash reading was 57.1. However, a score above 50.0 indicates expansion.

    Both output and new business grew at the weakest pace since December 2023. The overall growth in output was driven by sustained improvements in demand, tech investment, and the commissioning of new projects. The rise in new orders was backed by strong client demand and efforts to price better than their competitors.

    In line with an upturn in new business, firms raised their workforce numbers in February, with the pace of job creation reaching the second-best in the series history. Despite an increase in purchasing activity, the rate of expansion was the weakest in fourteen months.

    On the price front, input prices rose further amid greater bamboo, leather, marketing, rubber, and telecom prices. Nonetheless, the rate of inflation eased to its weakest in a year.

    Indian manufacturers expressed strong optimism about growth prospects for the coming year, with client demand expected to remain positive and support output.

    For comments and feedback contact: editorial@rttnews.com

    Economic News

    What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.





    Source link

  • USD/INR loses traction on likely RBI intervention

    USD/INR loses traction on likely RBI intervention


    • The Indian Rupee gains traction in Monday’s early European session. 
    • Foreign exchange intervention from the RBI might help limit the INR’s losses. 
    • India’s HSBC Manufacturing PMI and US ISM Manufacturing PMI will take center stage later on Monday. 

    The Indian Rupee (INR) gathers strength on Monday. The potential intervention from the Reserve Bank of India (RBI) could provide some support to the local currency. On the other hand, the latest tariff rounds from US President Donald Trump on Canada, Mexico, and potentially China could boost the US Dollar (USD) and exert some selling pressure on the INR. Additionally, a recovery in crude oil prices could drag the Indian Rupee lower as India is the world’s third-largest oil consumer. 

    Looking ahead, traders will keep an eye on India’s HSBC Manufacturing Purchasing Managers Index (PMI) for February, which will be published later on Monday. On the US docket, the ISM Manufacturing PMI will be released. 

    Indian Rupee rebounds despite Trump’s tariff threats

    • “Markets continue to live with the uncertainty and whiplash of the multitude of tariff proposals in the pipeline,” said MUFG Bank. 
    • India’s real Gross Domestic Product (GDP) grew 6.2% YoY in the fourth quarter (Q4) of 2024, compared to a 5.6% growth (revised from 5.4%) recorded in the previous quarter, according to data released by the National Statistical Office (NSO) on Friday. This figure came in weaker than the 6.3% expected. 
    • The US Personal Consumption Expenditures (PCE) Price Index increased 0.3% in January, in line with expectations, the US Bureau of Economic Analysis showed on Friday. 
    • The US PCE Price Index climbed 2.5% YoY in January, compared to 2.6% in December. The core PCE Price Index, which excludes volatile food and energy prices, climbed 2.6% YoY in January, down from 2.9% in December. Both figures came in line with the market consensus. 

    USD/INR sticks to positive bias in the longer term

    The Indian Rupee trades in negative territory. The bullish outlook of the USD/INR pair prevails, with the price being well-supported above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. Further upside looks favorable as the 14-day Relative Strength Index (RSI) is located above the midline near 63.75. 

    The first upside barrier for USD/INR emerges at 87.53, the high of February 28. A bullish candlestick breaking above this level could lift the pair to an all-time high near 88.00 then 88.50. 

    On the flip side, the initial support level for the pair is seen in the 87.05-87.00 zone, representing the low of February 27 and the round mark. A breach of the mentioned level could drag USD/INR to the next bearish targets at 86.48, the low of February 21, followed by 86.14, the low of January 27. 

     



    Source link

  • Gold price in India: Rates on February 25

    Gold price in India: Rates on February 25


    Gold prices fell in India on Tuesday, according to data compiled by FXStreet.

    The price for Gold stood at 8,205.23 Indian Rupees (INR) per gram, down compared with the INR 8,238.38 it cost on Monday.

    The price for Gold decreased to INR 95,704.90 per tola from INR 96,090.80 per tola a day earlier.

    Unit measure Gold Price in INR
    1 Gram 8,205.23
    10 Grams 82,053.46
    Tola 95,704.90
    Troy Ounce 255,209.80

     

    FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.

     

    Gold FAQs

    Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

    Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

    Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

    The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

    (An automation tool was used in creating this post.)



    Source link