Febuary 2, 2023
New Delhi, India
Indian Rupee Strengthens on India Budget 2024 Boost
The Indian Rupee (INR) continues its upward trajectory against the US Dollar (USD) as positive economic developments unfold. The recent announcement of India Budget 2024 by Finance Minister Nirmala Sitharaman has significantly contributed to the Rupee’s resilience.
India Budget 2024 Impact
Finance Minister Sitharaman outlined key measures aimed at bolstering the Indian economy. Increased spending on infrastructure projects, housing for villagers, and a commitment to lower the fiscal deficit have buoyed investor confidence. The budget prioritizes comprehensive governance, development, and focuses on the welfare of specific demographics, including the poor, women, youth, and farmers.
Positive Economic Indicators
Several positive economic indicators further support the strength of the Indian Rupee. The S&P Global Manufacturing PMI for India improved to 56.5 in January, showcasing the country’s robust manufacturing sector. Additionally, the International Monetary Fund (IMF) raised its growth projection for India, expecting a 6.7% growth in the fiscal year 2024.
USD Weakens Ahead of US NFP Data
On the other side of the equation, the USD faces uncertainty ahead of the release of the US Nonfarm Payrolls (NFP) data. Market players are closely monitoring this data, with expectations of 185K job additions in January. The anticipation has led to a weakening of the USD against the Indian Rupee.
Technical Analysis Signals Bearish Trend for USD/INR
Technical analysis of the USD/INR pair indicates a bearish trend. The pair is trading within a descending trend channel of 82.78–83.45, with a decisive break below the key 100-period Exponential Moving Average (EMA) on the daily chart. The 14-day Relative Strength Index (RSI) stands below the 50.0 midline, confirming downward momentum.
What to Watch For
Traders are keeping a close eye on key support and resistance levels. A potential support level for the pair is identified at 82.72. A bearish breakout below this level could signal further declines, possibly targeting the lows of August 23 at 82.45 and June 1 at 82.25. Conversely, a break above the resistance level of 83.00 may trigger a rally towards higher levels.
In conclusion, the Indian Rupee remains robust, supported by positive economic measures and indicators. As the USD faces uncertainty ahead of critical economic data, the USD/INR pair continues to exhibit a bearish trend, with traders closely watching for potential market movements.