The
Indian
Rupee
(INR)
loses
traction
on
Friday
amid
the
modest
recovery
of
the
US
Dollar
(USD).
The
demand
for
the
Greenback
from
state-run
banks
and
local
importers
limits
the
INR’s
potential
gains.
Additionally,
the
rebound
of
crude
oil
prices
also
exerts
some
selling
pressure
on
the
local
currency
as
India
is
the
third
largest
consumer
of
crude
oil
in
the
world,
after
the
United
States
and
China.
On
the
other
hand,
the
positive
trends
in
the
Indian
stock
market,
sustained
foreign
inflows,
and
India’s
strong
macroeconomic
growth
might
underpin
the
INR.
Also,
the
rising
expectation
of
the
US
Federal
Reserve
(Fed)
rate
cut
in
September
after
the
softer
US
inflation
data
is
likely
to
weigh
on
the
USD
and
cap
the
upside
for
the
USD/INR
pair
in
the
near
term.
Later
on
Friday,
Investors
will
keep
an
eye
on
the
Indian
Consumer
Price
Index
(CPI)
data,
which
is
expected
to
show
an
increase
of
4.8%
in
June.
Also,
the
Industrial
Production
and
Manufacturing
Output
will
be
released.
On
the
US
docket,
the
US
June
Producer
Price
Index
(PPI)
and
the
preliminary
July
Michigan
Consumer
Sentiment
gauge
will
be
published.
The
Indian
Rupee
trades
weaker
on
the
day.
According
to
the
daily
chart,
the
USD/INR
pair
keeps
the
bullish
vibe
unchanged
above
the
key
100-day
Exponential
Moving
Average
(EMA).
The
14-day
Relative
Strength
Index
(RSI)
holds
in
bullish
territory
above
the
50-midline,
suggesting
that
the
EMA
support
is
likely
to
hold
rather
than
break.
However,
in
the
shorter
term,
the
pair
has
remained
inside
its
month-long
range
since
March
21.
Any
follow-through
buying
above
the
upper
boundary
of
the
trading
range
at
83.65
could
lead
to
a
retest
of
the
all-time
high
of
83.75.
Extended
gains
will
see
a
rally
to
the
84.00
psychological
barrier.
Sustained
trading
below
the
100-day
EMA
at
83.37
could
pave
the
way
to
the
83.00
round
mark.
The
next
downside
target
is
seen
at
82.82,
a
low
of
January
12.
The
table
below
shows
the
percentage
change
of
US
Dollar
(USD)
against
listed
major
currencies
today.
US
Dollar
was
the
strongest
against
the
Japanese
Yen.
USD |
EUR |
GBP |
CAD |
AUD |
JPY |
NZD |
CHF |
|
USD |
0.07% | 0.14% | 0.06% | 0.15% | 0.71% | 0.02% | 0.09% | |
EUR |
-0.07% | 0.05% | -0.02% | 0.11% | 0.56% | -0.06% | 0.00% | |
GBP |
-0.14% | -0.07% | -0.08% | 0.06% | 0.53% | -0.11% | -0.05% | |
CAD |
-0.05% | 0.01% | 0.08% | 0.12% | 0.61% | -0.03% | 0.03% | |
AUD |
-0.15% | -0.12% | -0.06% | -0.14% | 0.47% | -0.17% | -0.13% | |
JPY |
-0.72% | -0.68% | -0.55% | -0.64% | -0.51% | -0.64% | -0.57% | |
NZD |
-0.04% | 0.04% | 0.11% | 0.03% | 0.16% | 0.61% | 0.05% | |
CHF |
-0.09% | -0.01% | 0.05% | -0.02% | 0.11% | 0.56% | -0.05% |
The
heat
map
shows
percentage
changes
of
major
currencies
against
each
other.
The
base
currency
is
picked
from
the
left
column,
while
the
quote
currency
is
picked
from
the
top
row.
For
example,
if
you
pick
the
Euro
from
the
left
column
and
move
along
the
horizontal
line
to
the
Japanese
Yen,
the
percentage
change
displayed
in
the
box
will
represent
EUR
(base)/JPY
(quote).
The
Indian
Rupee
(INR)
is
one
of
the
most
sensitive
currencies
to
external
factors.
The
price
of
Crude
Oil
(the
country
is
highly
dependent
on
imported
Oil),
the
value
of
the
US
Dollar
–
most
trade
is
conducted
in
USD
–
and
the
level
of
foreign
investment,
are
all
influential.
Direct
intervention
by
the
Reserve
Bank
of
India
(RBI)
in
FX
markets
to
keep
the
exchange
rate
stable,
as
well
as
the
level
of
interest
rates
set
by
the
RBI,
are
further
major
influencing
factors
on
the
Rupee.
The
Reserve
Bank
of
India
(RBI)
actively
intervenes
in
forex
markets
to
maintain
a
stable
exchange
rate,
to
help
facilitate
trade.
In
addition,
the
RBI
tries
to
maintain
the
inflation
rate
at
its
4%
target
by
adjusting
interest
rates.
Higher
interest
rates
usually
strengthen
the
Rupee.
This
is
due
to
the
role
of
the
‘carry
trade’
in
which
investors
borrow
in
countries
with
lower
interest
rates
so
as
to
place
their
money
in
countries’
offering
relatively
higher
interest
rates
and
profit
from
the
difference.
Macroeconomic
factors
that
influence
the
value
of
the
Rupee
include
inflation,
interest
rates,
the
economic
growth
rate
(GDP),
the
balance
of
trade,
and
inflows
from
foreign
investment.
A
higher
growth
rate
can
lead
to
more
overseas
investment,
pushing
up
demand
for
the
Rupee.
A
less
negative
balance
of
trade
will
eventually
lead
to
a
stronger
Rupee.
Higher
interest
rates,
especially
real
rates
(interest
rates
less
inflation)
are
also
positive
for
the
Rupee.
A
risk-on
environment
can
lead
to
greater
inflows
of
Foreign
Direct
and
Indirect
Investment
(FDI
and
FII),
which
also
benefit
the
Rupee.
Higher
inflation,
particularly,
if
it
is
comparatively
higher
than
India’s
peers,
is
generally
negative
for
the
currency
as
it
reflects
devaluation
through
oversupply.
Inflation
also
increases
the
cost
of
exports,
leading
to
more
Rupees
being
sold
to
purchase
foreign
imports,
which
is
Rupee-negative.
At
the
same
time,
higher
inflation
usually
leads
to
the
Reserve
Bank
of
India
(RBI)
raising
interest
rates
and
this
can
be
positive
for
the
Rupee,
due
to
increased
demand
from
international
investors.
The
opposite
effect
is
true
of
lower
inflation.
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