- Indian rupee weakens in the Asian session on Friday.
- Foreign flows are ongoing, demanding the US dollar at the end of the month, and the increasing federal reserve bank on INR.
- Merchants are preparing for India’s financial deficit and PCE data in December, which will be published later on Friday.
The Indian Rupee (INR) is still weak on Friday, as it was pressured by the outfits of the ongoing portfolio and the demand for the US dollar at the end of the month. Moreover, it is likely that the suspension of charity from the American Federal Reserve (Fed) from Greenback and practiced some pressure pressure on the local currency. Federal Reserve Chairman Jerome Powell said there will be a rush to reduce the interest rate again.
On the other hand, the intervention of the routine foreign currencies from the Indian Reserve Bank (RBI) by selling the US dollar may prevent INR from neglecting significantly. Later on Friday, the federal financial deficit in India will occupy the lead. On the American list, traders will monitor personal consumption expenses in December (PCE), personal income/spending, Chicago Procurement Manager Index (PMI) and speech from Federal Reserve Governor Michel Bowman.
Traders will also monitor the development surrounding Trump policies, including import tariffs, migration, tax discounts, and more flexible regulation. Analysts expect Trump’s policies to support the pressure of inflation in the American economy and demand the Federal Reserve to maintain higher rates for a longer period.
The Indian rupee remains on its defense in the midst of the global sermon
- Moody’s said in its latest report, the Indian economy is likely to slow in 2025, primarily driven by continuous and moderate inflationary pressure in local demand.
- Indian rupee weakened more than 1 % in January so far and is the worst performance among the main Asian currencies.
- US President Donald Trump threatens BRICS with 100 % definitions if it creates a new currency.
- The GDP of the United States (GDP) has grown at an annual rate of 2.3 % in the fourth quarter (Q4), compared to expansion of 3.1 % in the third quarter, the US Economic Analysis Office (Bea) showed on Thursday. This reading came in a weaker than the market expectation by 2.6 %.
- The unemployed demands for the American initial work for the week ended on January 24 to 207 thousand, according to the US Department of Labor. This reading came in less than 223K the previous week and the views of 220K are compatible.
- The suspended United States decreased by 5.5 % of the mother in December from a 1.6 % increased (revised from 2.2 %) in November, and the estimate was lost.
The US dollar/INR is merged in a strong trend
Indian rupee is trading in negative lands a day. The USD/INR pair was traded within the upper limits of the daily chart trading scope. The constructive view of the husband remains intact because the price is higher than the SIA moving average for 100 days (EMA). In addition, the 24 -day relative index (RSI) is located over the midfield near 65.45, indicating that the additional upward trend appears favorable.
The first bullish barrier appears at its highest level ever 86.69. If the husband expands his gains, we can see a new summit in the psychological brand 87.00.
On the other hand, the initial support level is seen at 86.31, which is the lowest level on January 28. The violation of this level can lead to the withdrawal of the sellers and pull the husband to 86.14, which is the lowest level on January 24, followed by 85.85 from January 10.
Indian rupee questions and answers
Indian rupee (INR) is one of the most sensitive currencies for external factors. The price of crude oil (the country depends greatly on imported oil), and the value of the US dollar – most trade in US dollars – and the level of foreign investment are all influential. The direct intervention by the Indian Reserve Bank (RBI) in the foreign currency markets to maintain the exchange rate is stable, as well as the level of interest rates that RBI has placed, significant impressive factors in the rupee.
The Indian Reserve Bank (RBI) is actively interfering in the Forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, RBI tries to keep the inflation rate in its goal by 4 % by setting interest rates. High interest rates usually enhance rupee. This is due to the role of “Trade Trade” in which investors in countries that have lower interest rates are borrowed in order to put their money in countries “that provide relatively higher interest rates and profit from the teams.
The total economic factors that affect the value of rupees include inflation, interest rates, economic growth rate (gross domestic product), trade balance, and flows from foreign investment. A higher growth rate can lead to more investment abroad, which increases the demand for rupee. The less negative trade balance will eventually lead to a stronger rupee. High interest rates, especially real prices (less inflationary interest rates) are also positive for rupee. The risk environment can lead to increased direct and indirect foreign investment flows (FDI and FII), which also benefits rupee.
The highest inflation, in particular, if it is relatively higher than its peers in India, is generally negative for the currency because it reflects the reduction in the value of the currency. Inflation also increases the cost of exports, which sells more rupees to buy foreign imports, which is negative rupee. At the same time, high inflation usually raises the Indian Reserve Bank (RBI) interest rates, and this may be positive for rupee, due to increased demand from international investors. The opposite effect applies to low inflation.
