September 27, 2024
New Delhi, India
USDINR Today
The Indian Rupee (INR) lost momentum on Friday, September 29, 2024, amid renewed demand for the US Dollar (USD) from importers, driven by month-end payments and the likely unwinding of long positions. Despite the dip, a fall in crude oil prices and a strong trend in Indian equities could help cushion the INR’s losses.
Key Factors Affecting INR:
- Month-End USD Demand: Importers increased their USD bids, creating downward pressure on the Rupee.
- Crude Oil: The decline in oil prices offered some relief to the Indian currency, limiting further losses.
- Indian Equities: A robust performance in Indian stock markets provided additional support to the INR.
US Data in Focus:
All eyes are on the US August Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, set to be released later on Friday.
- Headline PCE is forecast to rise 2.3% YoY in August.
- Core PCE, which excludes food and energy, is expected to show an increase of 2.7% YoY.
Also, the Michigan Consumer Sentiment Index for September will be closely watched by investors for any signs of consumer confidence impacting inflation expectations.
Recent US Economic Data:
- Durable Goods Orders for August remained flat, a significant drop from the 9.9% increase seen in July, but still better than the expected 2.6% decline.
- US GDP growth for Q2 was confirmed at 3.0% on Thursday, showing resilience in the economy despite global economic challenges.
Fed Commentary:
Fed Governor Lisa Cook reiterated her support for the 50 bps interest rate cut from last week, emphasizing the need to address “downside risks” to employment.
While the Indian Rupee faces pressure from month-end USD demand, supportive factors such as falling oil prices and positive stock market trends could limit its downside. Investors will be watching the US inflation data and consumer sentiment closely for cues on the future direction of USDINR.
Disclaimer:
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