December 4, 2023
New Delhi, India
Indian Rupee Gains Traction Amid Positive Economic Indicators
Investors are closely monitoring the Indian Rupee (INR) as it strengthens against the US Dollar (USD), driven by favorable economic conditions and upcoming events.
USD/INR Exchange Rate and Technical Analysis
The USD/INR pair is trading within a range of 82.80–83.40, maintaining a bullish bias despite a recent pullback. The Indian Rupee’s strength is supported by holding above the key 100-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) dropping below the 50.0 midline signals potential further downside.
- Upside Barrier: 83.40
- Support Levels: 83.00, 82.80, 82.60
Indian Economic Growth and RBI Expectations
India’s second-quarter Gross Domestic Product (GDP) expanded by 7.6%, making it the world’s fastest-growing major economy. Analysts attribute this growth to robust manufacturing performance and government spending. The Reserve Bank of India (RBI) is expected to maintain interest rates during its policy meeting on December 6–8, with a hawkish stance considering upbeat growth and inflation risks.
State Elections and Political Developments
Results of state elections in India are anticipated to alleviate political uncertainty and concerns about large-scale fiscal populism ahead of national elections. Prime Minister Narendra Modi’s party is poised to form governments in three of the recently held Indian states, contributing to positive sentiments.
S&P Global India Services PMI and Global Economic Conditions
Investors are awaiting the release of the S&P Global India Services PMI for November, with an estimated decrease from 58.4 to 58.0. The news set also highlights challenging global economic conditions, emphasizing weaker-than-expected US ISM Manufacturing PMI for November.
As the Indian Rupee continues to strengthen, market participants remain attentive to economic indicators, the RBI rate decision, and global economic conditions. The positive trajectory, coupled with political stability, instills confidence in the resilience and strength of the Indian economy.