October 28, 2024
New Delhi, India
USDINR Analysis
Rupee (INR) traded flat on Monday, despite a stronger US Dollar (USD) and the effects of recent lower crude oil prices, which could bolster the INR given India’s high oil consumption levels. However, the Rupee’s gains appear constrained by sustained foreign outflows from Indian stocks and the likelihood of a gradual pace in US Federal Reserve (Fed) rate cuts.
Market attention this week focuses on key US economic indicators, with the advanced Q3 GDP figures set for release on Wednesday, followed by the Core PCE Price Index for September on Thursday and the Nonfarm Payrolls (NFP) report on Friday. Notably, US rate futures indicate a 97.7% probability of a 25 bps Fed rate cut in November.
In recent US data, the Michigan Consumer Sentiment Index rose to 70.5 in October, surpassing expectations, while Durable Goods Orders fell by 0.8% month-over-month in September, a smaller decline than forecasted.
India’s economy shows positive trends, with growth projected to reach between 7.0% and 7.2% for the fiscal year 2024-25, according to Deloitte India. Preliminary HSBC data also reflected an October uptick in the Manufacturing PMI to 57.4, while the Services PMI rose to 57.9.
The Rupee’s gains in the European session were supported by falling crude oil prices, though persistent foreign outflows remain a limiting factor as global markets await key US economic data later this week.
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