The Indian Rupee faces significant challenges, trading close to an all-time low as trading begins on Wednesday in Asia. This decline is largely attributed to a stronger US Dollar and ongoing foreign fund withdrawals, which have put pressure on the local currency at a critical time for investors awaiting the results of the US presidential election.
Recent developments indicate that the USD’s strength and the advantage of Republican candidate Donald Trump in election polls are contributing to a gloomy outlook for the Indian Rupee (INR). Additionally, persistent selling in domestic equities continues to exert downward pressure on the currency, further complicating the financial landscape for investors.
Despite these challenges, the Indian central bank’s routine interventions to stabilize the Rupee may mitigate the risk of deeper depreciation. Market participants are keeping a close watch on the election outcomes, particularly with the US Federal Reserve’s meeting set to take place shortly afterward. As Trump’s market positions strengthen, expectations suggest that a victory for him could propel the Dollar to even higher levels.
Recent indicators also highlight the economic landscape in the US, with the ISM Services Purchasing Managers Index rising to 56.0 in October, surpassing previous estimates. The Federal Reserve’s plans are being closely monitored, with predictions hinting at a high likelihood of interest rate cuts later this year.
From a technical perspective, the USD/INR exchange rate maintains a bullish trend, largely supported by its position above the key 100-day Exponential Moving Average. The Relative Strength Index indicates sustained upward momentum, reinforcing a positive outlook in the near term. Resistance for the USD/INR is seen at 84.25, with potential for a climb toward 84.50 and the psychological level of 85.00. Conversely, any downward movement below 84.05 could signal stronger selling pressure, with further support levels identified below.
