January 7, 2025
New Delhi, India
USDINR Today
The Indian Rupee (INR) remained under pressure on Tuesday, following its recovery from a record low in the previous session. The currency’s weakness is driven by a broad-based US Dollar (USD) strength, steep declines in domestic equity markets, and persistent foreign capital outflows.
Key Developments:
- RBI Intervention: The Reserve Bank of India’s measures could help contain further depreciation of the Rupee.
- Global Factors: Market attention is focused on the incoming US administration under Donald Trump and its potential tariff plan. Analysts suggest that if tariffs are limited to critical sectors, global growth prospects could improve, leading to a weaker USD.
Economic Indicators:
- India Services PMI:
- Final reading for December eased to 59.3, down from 60.8 in the preliminary estimate.
- Economist Ines Lam of HSBC stated that forward-looking indicators like new business and future activity signal continued strong performance in the near term.
- US ISM Services PMI:
- The data, scheduled for release later Tuesday, is expected to show an improvement to 53.0 in December, compared to 52.1 in November.
- Fed Developments:
- Fed Governor Lisa Cook noted that policymakers might adopt a cautious approach toward further rate cuts, citing a resilient labor market and persistent inflationary pressures.
- The Federal Reserve’s December meeting minutes will be published on Wednesday, with the US Nonfarm Payrolls (NFP) report due Friday.
Outlook:
The Rupee’s trajectory will depend on domestic and global factors, including RBI intervention, stock market performance, and key US economic data. Investors are advised to monitor developments closely, especially with the US tariff plan and Federal Reserve actions shaping global currency trends.
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