March 19, 2024
New Delhi, India
USDINR
The Indian Rupee (INR) softened on Wednesday, retreating from a three-week high due to rising geopolitical tensions in the Middle East and US tariff threats. However, a weaker US Dollar (USD) and increased exporter USD sales provided some cushion for the local currency.
Key Market Drivers
- Geopolitical Risks: Rising tensions in the Middle East weighed on INR sentiment.
- Trump’s Tariffs: Reciprocal US tariffs set for April 2 add further pressure.
- Weaker USD: A broadly soft Greenback limited INR’s downside.
- India’s Trade Surplus: February’s current account surplus provided slight support.
Economic Indicators
- India’s WPI Inflation: Rose to 2.38% in February (from 2.31% in January), exceeding estimates of 2.36%.
- US Industrial Production: Surged 0.7% MoM in February (vs. 0.2% expected).
- US Housing Data:
- Building Permits fell 1.2% (biggest drop in 5 months).
- Housing Starts jumped 11.2% after an 11.5% decline in January.
Latest blog: Crypto Trading in India: Navigating New Regulations in 2025
Fed Rate Decision in Focus
Investors await the US Federal Reserve’s policy decision later today, expected to keep rates unchanged. The focus will be on the press conference and economic projections (‘dot plot’) for hints on future rate moves.
Market expectations for a May rate cut have increased to 25% from 18% last month (CME FedWatch Tool).
As of writing this article, USDINR was trading at 86.48 up 0.06%.
Disclaimer:
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.
