USD/INR Gains Modestly Amid Global Uncertainty, Eyes on Fed and Indian Budget


January 31, 2023

New Delhi, India

Amidst global economic uncertainties, the USD/INR currency pair is making modest gains, driven by several key factors.

Market Sentiment and Influencing Factors:

The Indian Rupee is facing a slight downturn against the US Dollar, with traders adopting a cautious stance ahead of crucial events. All eyes are on the Federal Reserve’s Open Market Committee (FOMC) interest rate decision, expected to maintain rates in the 5.25%–5.50% range.

Indian Economic Landscape:

India’s Chief Economic Adviser envisions an ambitious goal for the country, aiming to become a $7 trillion economy by 2030. However, concerns about sticky inflation and heightened oil prices due to Middle East tensions add a note of caution to this growth trajectory.

Federal Reserve’s Monetary Policy:

The Federal Reserve is likely to keep interest rates unchanged at its January meeting, but market expectations of a rate cut in May have increased to 85%, according to the CME FedWatch Tool.

Upcoming Events:

Investors are eagerly awaiting the FOMC rate decision and Chairman Jerome Powell’s press conference for insights into the central bank’s outlook. Additionally, India’s S&P Global Manufacturing PMI and the Indian Interim Budget 2024 for fiscal year 2024–25 are key events on the horizon.

Economic Indicators:

India’s foreign exchange reserves dropped, and the upcoming federal budget presentation anticipates a fiscal deficit reduction. Despite challenges, the Indian Rupee has been the best-performing currency in Asian markets in January, showing a 1% to 2% rise.

Also Read: BLS E-Services IPO Opens: Grey Market Premium, Subscription Status, and Key Details

Global Economic Indicators:

On the global front, US job openings rose in December, and the Conference Board Consumer Confidence hit a two-year high in January, reflecting the economic trends affecting the USD/INR pair.

Technical Analysis:

Technically, the USD/INR pair is within a descending trend channel, supported above the 100-period Exponential Moving Average (EMA) on the daily chart. Resistance levels at 83.25, 83.35, and 83.47, along with support at 83.00–83.05, 82.90, and 82.72, provide a roadmap for potential future movements.

In conclusion, the USD/INR pair navigates through a mix of global uncertainties and domestic economic challenges. Traders are advised to closely monitor the upcoming events and economic indicators to make informed decisions.

Check Latest Q3 Earnings


CurrencyVeda provides this news article for informational purposes only. We do not offer investment advice or recommendations. Before making any investment decisions, please conduct thorough research, consult with financial experts, and carefully consider your financial situation, risk tolerance, and investment goals. Investing in the stock market carries risks, and it’s essential to make informed choices based on your individual circumstances. CurrencyVeda is not liable for any actions taken based on the information provided in this article.