The US Dollar to Indian Rupee (USD/INR) exchange rate fell from a high of 60.7800 on Tuesday to trend in the region of 60.6700 following the publication of disappointing Consumer Price Inflation data for the US.
As Indian data is lacking for much of this week, movement in the emerging-market asset has largely been driven by global economic developments.
That being said, some Rupee strength was derived as Indian markets reopened following a four-day weekend and bunched up Dollar inflows were managed.
In the opinion of foreign exchange dealer Uday Bhat; ‘There was expectation that the Rupee will gain today due to bunched up inflows but there was some oil demand in the market which limited the gains. I don’t expect the Rupee to appreciate much from here. However, the close below 60.70 can technically take the unit to 60.20 levels.’
The Rupee maintained its advance against the ‘Greenback’ as the US asset fluctuated in response to a run of US reports.
Firstly, and perhaps most importantly, the level of consumer price gains in the world’s largest economy came in at the slowest pace for five months in July.
As economists predicted, the consumer price index rose by 0.1% in July on a month-on-month basis, slowing from a monthly gain of 0.3% in June. The index was up 2.0% on the year, matching projections and in line with the Federal Reserve’s target.
The core measure of inflation (which takes out volatile elements like fuel and food) rose by less-than-anticipated. The 0.1% month-on-month increase defied expectations for a climb of 0.2%.
Separate US data showed a far stronger-than-anticipated surge in US Housing Starts in July. Starts jumped by 15/7% in July, month-on-month, rather than rising by the 8.1% anticipated. This wiped out the previous month’s positively revised decline of -4.0%.
The US Dollar to Indian Rupee (USD/INR) exchange rate achieved a high of 60.7800.
Similarly, the number of US building permits issued in July was much higher than forecast by industry experts. An increase of 8.1% had been projected but permits actually rallied by 2.8%. June’s decline was revised to -3.2%.
In reference to the performance of US markets, one London-based strategist noted; ‘Yesterday was probably a reaction to the unwarranted volatility on Friday, but the rest of the week is going to be about the FOMC (Federal Open Market Committee) minutes and Jackson Hole conference. On both counts we and the market expect the prevailing dovish stance to hold, providing upside momentum for markets.’
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate also declined on Tuesday as investors ditched the British asset following a below-forecast inflation figure for the UK.
The GBP/INR exchange rate hit a low of 100.8090 and was trending lower for the remainder of the European session.
US Dollar to Indian Rupee Exchange Rate Forecast
Tomorrow the main cause of movement in the USD/INR exchange rate is likely to be the publication of minutes from the most recent Federal Open Market Committee meeting.
If the minutes are particularly dovish in tone the US Dollar could lose ground against peers like the Rupee.
Conversely, if the minutes indicate that the Federal Open Market Committee is becoming increasingly divided on the subject of the future path of fiscal policy the US Dollar could rally and recover all of today’s losses against the Rupee.
The US Dollar to Indian Rupee (USD/INR) exchange rate is currently trading in the region of 60.6700
US Dollar to Indian Rupee (USD/INR) Exchange Rate Continues to Trend Lower
The US Dollar to Indian Rupee is currently trending in the region of 60.6684.
The ‘Greenback’ (USD) to Indian Rupee has continued to trend downwards this morning with no domestic data releases, as yet, to alter the course.
The Federal Reserve will be releasing the minutes from the last meeting in July. If speculation of a rate hike rhetoric comes to pass the Dollar will see gains across the board.
There are no Indian domestic data releases today so expect any changes to be triggered by foreign economic movement.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,100.8520,
US Dollar,,Indian Rupee,60.6700,
Euro,,Indian Rupee,80.8550,
Australian Dollar,,Indian Rupee,56.6170,
New Zealand Dollar,,Indian Rupee,51.3340,
[/table]
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