The Indian Rupee (INR) demonstrated stability during Wednesday’s Asian trading session as market participants closely monitored developments in the US dollar. Factors such as the increasing yields on US Treasury bonds and notable foreign investments exiting Indian equity and debt markets pose potential challenges for the INR. However, the regular interventions by the Reserve Bank of India (RBI) serve as a deterrent to significant depreciation of the currency.
A decrease in crude oil prices may offer some support to the Indian Rupee, given India’s status as the third-largest oil consumer globally. While there are pressures on the currency, the RBI’s actions to stabilize the rupee may manage the extent of its decline. Looking ahead, market players are keenly awaiting key US economic indicators, including the advanced GDP data for Q3 and the October employment figures, which could provide direction for currency movements.
In October, foreign investors have withdrawn approximately $10 billion from Indian markets, marking a significant selling trend. Meanwhile, the RBI has projected a growth rate of 7.2% for the Indian economy in the fiscal year 2025, though some analysts suggest these growth forecasts may be overly optimistic in light of emerging economic trends.
Recent data from the US has shown job openings at 7.44 million, a reduction from August’s revised figure, reflecting a tighter labor market than anticipated. Concurrently, consumer confidence measures improved significantly in October, indicating a more positive outlook among American consumers.
Market expectations show a strong likelihood of a 25 basis points rate cut by the Federal Reserve in its upcoming meeting, hinting at a cooperative monetary environment.
From a technical perspective, the USD/INR pair continues on a bullish trajectory, reinforcing positive investor sentiment in the longer term. The currency is positioned above its 100-day Exponential Moving Average, signaling potential upward movement. Immediate resistance lies around 84.22, with further gains possibly leading to levels as high as 85.00. Conversely, a drop below 84.05 could trigger a shift downward toward 83.76, indicating a cautious approach from traders in the current market landscape.
