Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Popular stocks

Crypto

CFD

Currencies

Support

Gold

Home » Markets News » Indian Rupee Falls as Demand for USD Surges Amid Rising Oil Prices

Indian Rupee Falls as Demand for USD Surges Amid Rising Oil Prices

  • September 17, 2024
  • 73

In Tuesday’s Asian trading session, the Indian Rupee (INR) is experiencing a decline, coming off a three-day winning streak. Increased demand for the U.S. dollar, driven primarily by local importers like oil companies, is exerting pressure on the INR. Additionally, rising crude oil prices are posing challenges for the currency, as India ranks as the third-largest oil consumer globally, following the United States and China.

Despite the downward trend, positive sentiments regarding a substantial cut in Federal Reserve interest rates may provide some support for the INR. The market anticipates significant foreign investment flows into Indian equity markets, which could help bolster the currency’s strength. Investors are particularly focused on upcoming reports related to the Indian Wholesale Price Index (WPI) Inflation, as well as food and fuel expenses for August. Additionally, US Retail Sales data, expected to show a 0.2% month-on-month increase in August after a stronger rise of 1.0% in July, will be closely monitored.

Forecasts suggest that the Indian WPI Inflation may decrease to 1.80% year-on-year for August from 2.04% in July. The Reserve Bank of India (RBI) has projected economic growth of around 7.5% or more, which exceeds its previous estimate of 7.2% for the ongoing financial year.

On the U.S. side, the NY Empire State Manufacturing Index showed improvement, rising to 11.5 in September from a previous decline. Investors are increasingly wagering on a more significant interest rate cut by the Federal Reserve, with projections now indicating a 67% chance of a 50 basis point reduction, up from 50% just days earlier.

The INR’s decline is apparent, with market indicators suggesting that while the USD/INR trading pair remains bullish above the 100-day Exponential Moving Average, the potential for further decreases exists. A critical resistance level is identified around the 83.90-84.00 range, while the initial support is marked at 83.82, with additional selling pressure possibly exposing the 100-day EMA at 83.64.

This site is registered on wpml.org as a development site.