September 23, 2024
New Delhi, India
USDINR Today
The Indian Rupee (INR) continued its rally on Monday, buoyed by strong inflows of foreign funds into Indian equity markets. This positive momentum comes despite potential headwinds from rising crude oil prices and renewed US Dollar (USD) demand from importers, which may limit further upside for the INR.
Key Market Influences:
- US PMI Data and Fed Remarks:
Investors are closely watching the US Purchasing Managers Index (PMI) data for September, set to be released later today. Additionally, remarks from Federal Reserve officials Austan Goolsbee and Raphael Bostic could provide further insights into the Fed’s policy stance. Any dovish signals or weaker US data could weaken the USD, offering further support to the INR. - Crude Oil and USD Demand:
A potential rise in crude oil prices and renewed USD demand from importers could restrain the Rupee’s rally. The strength of the USD remains a key factor in shaping the trajectory of the INR. - Fed’s Interest Rate Outlook:
Fed Governor Christopher Waller highlighted the possibility of further interest rate cuts in the coming months, suggesting that the Fed may even pause rate changes depending on economic data. Meanwhile, Michelle Bowman cautioned against cutting rates too early, indicating the Fed’s vigilance regarding inflation risks.
Additional Economic Indicators:
- India’s Foreign Exchange Reserves:
India’s forex reserves rose by $223 million, reaching an all-time high of $689.458 billion, as reported by the Reserve Bank of India (RBI). - HSBC India Manufacturing PMI:
The HSBC India Manufacturing PMI eased slightly to 56.7 in September, down from 57.5 in the previous month, reflecting a moderate slowdown in the manufacturing sector. - India’s Economic Growth Forecast:
According to S&P Global India, the country is projected to grow at an annual rate of 6.7% and is expected to become the world’s third-largest economy by 2030-2031.
While the Indian Rupee enjoys a strong start to the week, bolstered by foreign inflows, market participants are keeping a close watch on crude oil prices, USD demand, and the Fed’s upcoming economic data and policy signals.
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