The Indian rupee is likely to face pressure at the start of the week following a rise in U.S. business activity to a two-year high, which has bolstered demand for the dollar.
Non-deliverable forwards indicate the rupee (USDINR) will open slightly weaker against the U.S. dollar from its previous close of 83.5325. The currency reached an all-time low of 83.6650 last Thursday, largely due to outflows related to Vodafone Group selling its stake in India’s Indus Towers.
Picture: Downside prevails for Rupee as seen on the VT Markets app.
See: The dollar strengthens as seen on the VT Markets app.
On Friday, the dollar index (DXY) and U.S. Treasury yields nudged higher. The S&P June flash U.S. Composite PMI Output Index, which tracks manufacturing and services sectors, rose to a 26-month high.
This increase has raised concerns about a potential delay in the Federal Reserve’s rate cut timing. Investors have priced in two interest rate cuts by the Fed this year, a view more optimistic than what policymakers signaled at their last meeting.
Also read: Rupee Under Pressure From Delayed US Rate Cuts
The upcoming U.S. core PCE data, due this Friday, will provide more insights into the timing and extent of these rate cuts. The May core PCE index, the Fed’s preferred inflation gauge, is expected to rise at a muted pace of 0.1% month-on-month.
The one-month non-deliverable rupee (INRNDFOR=) forward stands at 83.60, with the onshore one-month forward premium at 7.25 paisa. The dollar index (DXY) is at 105.84, reflecting a strong dollar. Brent crude futures have dipped to $85.12, providing some relief on the import cost front. The ten-year U.S. note yield is at 4.25%, indicating firm yields.
The Indian rupee’s performance will be closely tied to these global indicators. The rise in U.S. business activity and a stronger dollar create a challenging environment for the rupee
Start trading now — click here to create your live VT Markets account.
Education
Company
FAQ
Promotion
Risk Warning: Trading CFDs carries a high level of risk and may not be suitable for all investors. Leverage in CFD trading can magnify gains and losses, potentially exceeding your original capital. It’s crucial to fully understand and acknowledge the associated risks before trading CFDs. Consider your financial situation, investment goals, and risk tolerance before making trading decisions. Past performance is not indicative of future results. Refer to our legal documents for a comprehensive understanding of CFD trading risks.
The information on this website is general and doesn’t account for your individual goals, financial situation, or needs. VT Markets cannot be held liable for the relevance, accuracy, timeliness, or completeness of any website information.
Our services and information on this website are not provided to residents of certain countries, including the United States, Singapore, Russia, and jurisdictions listed on the FATF and global sanctions lists. They are not intended for distribution or use in any location where such distribution or use would contravene local law or regulation.
VT Markets is a brand name with multiple entities authorised and registered in various jurisdictions.
· VT Global Pty Ltd is authorised and regulated by the Australian Securities & Investments Commission (ASIC) under licence number 516246.
· VT Global is not an issuer or market maker of derivatives and is only allowed to provide services to wholesale clients.
· VT Markets (Pty) Ltd is an authorised Financial Service Provider (FSP) registered and regulated by the Financial Sector Conduct Authority (FSCA) of South Africa under license number 50865.
· VT Markets Limited is an investment dealer authorised and regulated by the Mauritius Financial Services Commission (FSC) under license number GB23202269.
· VTMarkets Ltd, registered in the Republic of Cyprus with registration number HE436466 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.
Copyright © 2024 VT Markets.