The Indian Rupee (INR) is stabilizing during the Asian trading session on Wednesday, following a dip to an all-time low yesterday. The recent downturn in the currency has been influenced by a number of factors, including disappointing GDP growth figures, foreign capital outflows, and a robust demand for the US Dollar (USD). Despite these challenges, some analysts suggest that the Reserve Bank of India (RBI) may intervene in the currency market to bolster the rupee, potentially limiting its decline.
Market participants are looking ahead to the release of the HSBC India Services Purchasing Managers Index (PMI), scheduled for later in the day. Economists anticipate an increase in the index to 59.2 for November, up from 58.5 in October. A stronger-than-expected PMI could provide essential support for the rupee. Concurrently, key US economic indicators, such as the ADP Employment Change, S&P Global Services PMI, ISM Services PMI, and the latest updates from the Federal Reserve, are set to be published, with particular attention on Fed Chair Jerome Powell’s speech.
The Indian Rupee may remain susceptible to geopolitical tensions and external market pressures. Although the RBI’s interventions could provide temporary relief, the underlying economic factors are expected to keep the currency under pressure.
In related economic news from the US, job openings climbed from 7.372 million in October to 7.744 million in November, surpassing expectations. Meanwhile, the Federal Reserve officials have expressed optimism regarding inflation and the job market while emphasizing the need for ongoing policy adjustments.
Currently, the INR remains flat against the USD as traders assess the currency’s outlook. The USD/INR pair appears well-supported above the critical 100-day Exponential Moving Average (EMA), suggesting a potential upward trajectory. The key resistance level is positioned at 84.77, and a sustained move above this could trigger further advances towards 85.00, accompanied by additional key levels at 85.50. Conversely, if the pair breaches the support level at 84.55, it may retreat to around 84.22, with the critical level of 84.00 serving as a crucial point of contention.
