Despite the Reserve Bank of India’s best efforts, and the likelihood of the US Federal Reserve tapering stimulus declining in the face of disappointing domestic data, it seems that the Rupee could continue to trade above 60 per Dollar for some time to come.
The US Dollar to Indian Rupee Exchange Rate was in the region of 61.0800 as of 10:10 GMT
According to some investors, the Indian asset could even weaken towards the mid 60’s in the months ahead as the nation struggles to combat a record current account deficit, concerning economic growth and lacklustre fundamentals.
The Indian central bank may have made it clear that it will continue imposing temporary measures to support the Rupee, but domestic forwards markets (a measure of market expectations) have forecast that the Rupee could be trading at 65 per Dollar within 12 months.
The USD/INR exchange rate hit a high of 61.4000
According to industry expert Walter Rossini: ‘We’re very worried about the situation in India. There’s no fast fix to this situation. Probably we will see a turnaround of the economic cycle in a few quarters but Rupee volatility will stay for longer. I don’t see a strong case for it coming back to the average level of last year.’
Earlier this week the Rupee hit a fresh record low of 61.80 per Dollar.
Although the Indian currency has strengthened modestly since then, it could post further losses if today’s US initial jobless claims data positively beats expectations – boosting the prospect of the Fed tapering easing in September.
The Rupee has also softened against the Pound since the release of yesterday’s Bank of England inflation report.
The next key pieces of influential Indian data, industrial production and manufacturing output, are scheduled for publication on the 12th.
Current Rupee (INR) Exchange Rates:
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The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 94.7461 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 81.5401 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.0800 <
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 55.3095 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 48.7249 <
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.6992 <
(Correct as of 10:10 GMT)
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