US Dollar to Indian Rupee (USD/INR) Exchange Rate Forecast: Rupee at 10-Month Low

US Dollar to Indian Rupee (USD/INR) Exchange Rate Falls to Fresh Low

Prior to the release of India’s manufacturing/industrial production figures and inflation data, the US Dollar to Indian Rupee (USD/INR) exchange rate advanced to a 10 month high.

According to Religare Retail Research; ‘Indian Rupee traded lower against the ‘Greenback’, in line with most of its Asian peers, as disappointing inflation data from China dented the demand for emerging market currencies.’

If today’s Indian data impresses, the Rupee could claw back some of its recent losses.

It’s also been forecast that the Reserve Bank of India (RBI) could intervene in the currency market to prevent the Rupee falling any lower.

The US Dollar to Indian Rupee (USD/INR) exchange rate extended declines on Thursday as the US published stronger-than-anticipated US retail sales figures.

USD/INR Exchange Rate Trending Higher as US Retail Sales Climb

US retail sales were shown to have increased by 0.7% on the month in November, up from a gain of 0.5% in October and a far more impressive gain that the 0.4% increase expected.

Retail sales excluding autos climbed by 0.5%.

The US Dollar rallied across the board as a result of the figures and the USD/INR exchange rate advanced to a high of 62.3750. Industry expert Thomas Simons said of the result; ‘The consumer is doing pretty well. Any money consumers are saving from lower gasoline prices is being deployed elsewhere. The broad-based increase in sales is quite encouraging.’

The US Dollar also derived strength from US initial jobless claims falling by more than anticipated in the week ending December 6th.

The US Dollar to Indian Rupee (USD/INR) exchange rate advanced to a nine-month high ahead of the release of US Advance Retail Sales data.

USD/INR Exchange Rate Achieves High of 62.3450

During the European session, the US Dollar to Indian Rupee (USD/INR) exchange rate advanced as a risk-off environment limited demand for emerging-market currencies and the US Dollar continued its recent rally.

The ‘Greenback’ has been trending in a stronger position against most of its currency counterparts as a result of positive US ecostats and speculation that the Federal Reserve could look to increase interest rates sooner than previously projected.

In the view of some industry experts, the Rupee’s downtrend against the US Dollar is likely to continue in spite of falling domestic inflation and a current account improving off the back of the collapse in commodity prices.

In the opinion of Killol Pandya from Credit Suisse; ‘It is possible that the Rupee may test 63 in the near future. However, there will be some resistance probably at that level and then the market participants, including the Reserve Bank, will probably take a fresh look at how the Rupee is behaving. If we are faced with a globally strengthening Dollar, then I do not really think the Reserve Bank of India will be putting in too much ammunition in defending the big figure of 62 and will probably let the currency slide a little more before it draws a fresh defence line for the currency.’

US Dollar to Indian Rupee (USD/INR) Exchange Rate to Fluctuate on Retail Sales Report

In the hours ahead the US Dollar to Indian Rupee (USD/INR) exchange rate could post additional gains if the US Advance Retail Sales report shows the sales gain expected.

Economists have predicted that retail sales increased by 0.4% on the month in November following the previous month’s 0.3% gain.

A stronger-than-anticipated rally would bolster Federal Reserve interest rate hike speculation and give the US Dollar a lift.

The US initial jobless and continuing claims figures will also be of interest.

Last week’s unemployment benefits report registered an unexpected increase, so investors will be hoping for a decline this time out.