October 18, 2024
New Delhi, India
USDINR Today
The Indian Rupee (INR) recovered on Friday, benefiting from a modest decline in the US Dollar (USD). However, the INR’s gains may be limited due to several challenges, including substantial foreign fund outflows, a negative trend in domestic equities, and a recent surge in crude oil prices. Expectations that the US Federal Reserve (Fed) will cut rates less aggressively could also strengthen the USD, potentially weighing on the INR.
Key Drivers
- Foreign Fund Outflows: Foreign investors have sold $8 billion worth of Indian equities in October so far, marking the largest monthly outflow in over four years.
- Crude Oil Prices: The spike in global crude oil prices adds additional pressure on the Indian Rupee.
- Fed Rate Expectations: According to the CME FedWatch tool, there is a 90.3% chance of a 25 basis point Fed rate cut in November, limiting the potential downside of the USD.
RBI Intervention
Routine foreign exchange interventions by the Reserve Bank of India (RBI) through USD sales are expected to help curb the INR’s losses. This could offer some relief in maintaining stability in the currency despite external pressures.
US Economic Data
Looking ahead, investors are closely monitoring key US economic data, including Building Permits and Housing Starts, expected later today. Remarks from Federal Reserve officials Raphael Bostic, Neel Kashkari, and Christopher Waller could also influence market sentiment and the USD’s trajectory.
US Retail and Job Data
Recent US economic data showed stronger-than-expected retail sales for September, which climbed by 0.4% month-on-month, beating estimates of 0.3%. Initial Jobless Claims for the week ending October 11 rose to 241K, below expectations of 260K.
As of wrting USDINR was trading flat at 84.0 by 10:15 A.M IST today.
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