October 16, 2024
New Delhi, India
USD/INR
The USD/INR pair continues to hover around its all-time high of 84.14 as the Indian Rupee (INR) faces pressure from foreign exchange outflows. Traders are also evaluating the Reserve Bank of India’s (RBI) policy outlook, particularly in response to India’s latest Consumer Price Index (CPI) data.
Key Factors:
- Inflation Surge: India’s CPI hit a nine-month high of 5.49% YoY in September, far exceeding the RBI’s target of 4%. This has reduced market expectations for near-term rate cuts from the RBI.
- Oil Prices Impact: The Indian Rupee may gain some relief as global oil prices drop. West Texas Intermediate (WTI) Oil is trading around $70.30 per barrel, amid demand concerns. Lower crude prices could benefit India, the world’s third-largest oil importer.
- US Dollar Strength: The USD continues to rise, supported by strong U.S. economic data, reducing expectations for significant Federal Reserve rate cuts.
Market Moves:
- Foreign Investor Sell-Off: Foreign institutional investors sold ₹37.32 billion worth of Indian stocks, marking their eleventh consecutive session of net selling, while domestic investors bought ₹22.78 billion worth of shares.
Despite these challenges, the downside for the Rupee may be limited by falling oil prices, providing some hope for stabilization in the near term.
Disclaimer:
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