January 6, 2025
New Delhi, India
USDINR
The Indian Rupee (INR) continued its downward trajectory on Monday, following a record-low closing in the previous session. The local currency remains under pressure due to:
- Weaker Chinese Yuan
- US Fed’s restrictive rate policy outlook
- Tariff threats from US President-elect Donald Trump’s administration
RBI Intervention Likely
The Reserve Bank of India (RBI) is expected to step in by selling US Dollars to stabilize the Rupee and curb excessive depreciation.
Key Data to Watch
- India:
- December HSBC Composite and Services PMI figures to provide insights into domestic economic activity.
- US:
- December S&P Global Composite and Services PMI due later today.
- Comments from Fed officials, including Lisa Cook, could influence market sentiment.
Expert Insights
Radhika Rao, Executive Director and Senior Economist at DBS Bank, noted,
“Global developments remain a wild card, especially with the US administration transition in mid-January 2025.”
A Bank of Baroda report anticipates continued INR depreciation in 2025, driven by:
- Volatile foreign portfolio investment (FPI) flows
- Stronger US Dollar outlook
US Economic Data and Fed Commentary
- US Manufacturing PMI: Climbed to 49.3 in December (above market consensus of 48.4).
- Fed Officials’ Views:
- Mary Daly: Inflation remains uncomfortably above the 2% target.
- Adriana Kugler: Fed is actively working to address inflation concerns.
- Thomas Barkin: Rates should stay restrictive until inflation trends closer to the target.
Market Outlook
The Indian Rupee’s performance hinges on upcoming PMI data and global developments, including US Fed policies and geopolitical uncertainties. Traders and investors remain cautious, bracing for volatility in the near term.
Stay tuned for further updates as economic events unfold.
Check Latest Market News
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.
