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04/09/24
106
INR Steady Amid RBI Intervention Speculation and Falling Crude Prices
The Indian Rupee (INR) is holding its ground during Wednesday’s trading session in Asia, as analysts anticipate potential interventions from the Reserve Bank of India (RBI) to maintain stability against the US Dollar (USD). The INR is particularly sensitive as it approaches the significant level of 84. Concurrently, a decline in crude oil prices — now the lowest since January — may offer some support to the currency, given India’s position as a major oil consumer and importer.
The strength of the USD is a pressing concern for the INR, as renewed demand from importers, coupled with increased risk aversion, could undermine its value. Traders are also keeping an eye on the upcoming HSBC India Services Purchasing Managers Index (PMI) release, which is expected to provide fresh insights into economic activity. Additionally, US economic indicators including job openings and the Fed’s Beige Book will be released, while the focus will shift to the Nonfarm Payrolls data later this week, which may influence Federal Reserve rate-cut expectations.
In broader economic news, the World Bank has revised India’s growth projection upwards to 7% for the current financial year, a significant increase from the previously estimated 6.6%. This optimism comes amid calls for consistent economic growth to meet long-term objectives set by the Indian government. The HSBC India Services PMI is predicted to show slight improvement, suggesting that business sentiment is stabilizing.
In the realm of technical trading, the USD/INR pair appears to be consolidating. The outlook remains bullish longer-term, as the price sustains above the crucial 100-day Exponential Moving Average. However, the psychological barrier at 84.00 poses a challenge. Should this level be breached decisively, it could lead to upward movement towards 84.50. Conversely, if the pair declines, significant support is identified at 83.84, with potential further disruption lying at the 100-day EMA level of 83.62.
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