US Dollar to Indian Rupee (USD/INR) Exchange Rate Down 0.2%
Although yesterday’s SNB development saw demand for the US Dollar surge, the US Dollar to Indian Rupee (USD/INR) pared initial gains during the local session as the prospect of buoyant foreign capital inflows supported the emerging-market asset.
According to industry expert Pramit Brahmbhatt; ‘The Rupee is expected to gain and take cures from positive equities. However, strength in Dollar may keep the Rupee under pressure. We expect Rupee to trade in a range of 61.50 – 62.50/Dollar today.’
The Rupee could lose ground against the ‘Greenback’ in the hours ahead if the two major US reports, Consumer Price Inflation and Consumer Confidence, deliver positive surprises.
The US Dollar to Indian Rupee (USD/INR) exchange rate is currently trending in the region of 61.9000
Update…
The US Dollar to Indian Rupee (USD/INR) exchange rate fluctuated on Thursday as investors responded to surprising central bank developments.
US Dollar to Indian Rupee (USD/INR) Exchange Rate Declines as RBI Cuts Rates
During the local session the US Dollar to Indian Rupee (USD/INR) exchange rate fell to its lowest level since November 2014 in response to an unforeseen cut in borrowing costs from the Reserve Bank of India (RBI).
The Rupee rallied by around 0.6% against its US peer in the initial aftermath of the decision.
Earlier this week the Rupee was supported as India’s Consumer Price and Wholesale Price indexes supported the case in favour of the central bank adjusting borrowing costs.
The consumer price index showed a slower-than-forecast increase in consumer price gains, as did the WPI. Crucially, the CPI held below the RBI’s target level for a third month.
The central bank slashed the main repurchase rate by quarter of a percentage point, taking it from 8% to 7.75%.
The US Dollar to Indian Rupee (USD/INR) exchange rate hit a high of 62.1000
The decision saw investment officer Arvind Virmani note; ‘The RBI had to take cognizance of falling commodity prices. The disinflationary forces in the world are getting stronger by the day. We can’t remain insulated.’
The USD/INR exchange rate had previously struggled after December’s retail sales report for the US showed an unexpectedly steep decline of -0.9%. Economists had anticipated a much softer decline of just -0.1%.
Additionally, on Thursday it was revealed that a greater-than-forecast number of people applied for both first time and continuing unemployment benefits in the US in the week ending January 9th. Negative US ecostats undermine expectations for a Federal Reserve rate increase and put pressure on the ‘Greenback’.
However, the Rupee moved away from an almost two-month high against the US Dollar after the Swiss National Bank’s decision to remove its Euro cap caused market turmoil.
As one trader observed; ‘The measures by the Swiss central bank is what really made the move. The Euro fell against the Dollar and the resulting strengthening ensured that the market was caught short resulting in huge Dollar demand here. Importers also came in to cover their positions noting the sharp rise in the Rupee and on expectations that the currency will not move up sharply from those levels’.
US Dollar to Indian Rupee (USD/INR) Exchange Rate Forecast
Tomorrow the main cause of movement in the US Dollar to Indian Rupee (USD/INR) exchange rate is likely to be the US Consumer Price Index.
US inflation is expected to have fallen from 1.3% to 0.7% on the year in December.
The US Dollar to Indian Rupee (USD/INR) exchange rate fell to a low of 61.4800
A weaker number could see the Fed reconsider adjusting borrowing costs in the first half of the year.
The University of Michigan Consumer Confidence index will also be of interest.
The US Dollar to Indian Rupee (USD/INR) exchange rate is currently trending in the region of 62.0550
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 94.6590
The Euro to Indian Rupee (EUR/INR) exchange rate is currently trending in the region of 72.6850
