January 9, 2025
New Delhi, India
USDINR Analysis
The Indian Rupee (INR) neared a fresh all-time low today, pressured by a combination of global and domestic factors. Weak sentiment in equity markets, foreign outflows, and a firm US Dollar (USD) added to the local currency’s struggles.
Key Highlights:
- USDINR Performance: The Rupee slipped 0.2% to a record closing low of 85.8550 on Wednesday, with projections indicating further declines.
- MUFG forecasts INR could weaken to 86.8 per USD this quarter.
- Citigroup Inc. predicts a fall to 86.35 per USD.
- Economic Concerns:
- India’s economic growth is projected to slow to 6.4% in FY25, down from 8.2% in FY24.
- Persistent foreign fund outflows and tepid equity market performance exacerbate the Rupee’s woes.
RBI Intervention Expected:
The Reserve Bank of India (RBI) is anticipated to intervene in the forex market by selling USD to curb the Rupee’s decline.
Global Cues Impacting INR:
- US Economic Data:
- Weekly Initial Jobless Claims fell to 201K, better than the expected 218K, indicating resilience in the US labor market.
- Focus shifts to Friday’s Nonfarm Payrolls (NFP) report, which will shed more light on employment trends and wage growth.
- Federal Reserve Outlook:
- Minutes from the December FOMC meeting suggest inflation is likely to ease further, but price pressures remain a concern.
- Fed Governor Christopher Waller noted that inflation should continue falling in 2025, allowing room for rate cuts at a cautious pace.
Crude Oil and Market Sentiment:
Higher crude oil prices and subdued domestic equity markets have added to the pressure on the Rupee. Investors are also closely watching the Federal Reserve’s commentary for clarity on interest rate trends in the US.
Outlook:
With global and domestic challenges persisting, the Indian Rupee faces an uphill battle. As the RBI steps in to stabilize the currency, market participants remain focused on international developments, including US employment data and interest rate guidance, which will influence the Rupee’s trajectory in the coming days.
USDINR was trading at 85.91 by 3 PM IST today.
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.
