USDINR Maintains Stability Amidst Anticipation of Indian Trade Balance and US PMI Data


December 15, 2023

New Delhi, India

Rupee Holding Ground

The Indian Rupee (INR) is holding its ground despite a dynamic economic landscape, with mixed signals from India and the global stage. In this update, we delve into key factors influencing the USDINR currency pair, offering insights into market movements.

Indian Economic Landscape:

Inflation on the Rise India’s Wholesale Price Index (WPI) inflation has climbed to 0.26% in November, marking a significant shift from the deflationary zone observed since March 2023. Various industries contribute to inflationary pressures, as noted by the commerce ministry.

Reserve Bank of India’s Perspective Governor Shaktikanta Das acknowledges the potential for inflation upticks in November and December, primarily due to food output pressures. The Consumer Price Index (CPI) climbed to 5.55% YoY in November, surpassing expectations.

Asian Development Bank’s Optimistic Outlook The Asian Development Bank (ADB) has revised its forecast, projecting India’s economy to expand by 6.7% in Financial Year 2023–24, up from the previous estimate of 6.3% in September.

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Global Economic Indicators:

US Retail Sales and Federal Reserve Decision In the US, Retail Sales exceeded expectations, growing by 0.3% in November. Meanwhile, the Federal Reserve maintained interest rates unchanged at 5.25%–5.5% in its December meeting.

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Market Monitoring:

Investors are keeping a close eye on the Indian Trade Balance and the US S&P Global Purchasing Managers’ Index (PMI) for potential market-moving information. Weekly Initial Jobless Claims in the US showed a decrease, but Continuing Claims rose.

Technical Analysis:

The USDINR pair is currently in a multi-month trading range of 82.80–83.40. Technical indicators, including the 100-day Exponential Moving Average (EMA) and the 14-day Relative Strength Index (RSI), suggest a cautiously optimistic outlook.

The first upside barrier is at 83.40, with further targets at the year-to-date high of 83.47 and the psychological mark of 84.00. On the downside, 83.00 is a critical support level, followed by 82.80 and 82.60.

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As economic indicators provide a nuanced perspective, the Indian Rupee remains resilient. Market participants are closely watching for cues from both domestic and global fronts, anticipating potential shifts in the USDINR currency pair.


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