The Indian Rupee started the week on a positive note, defying the stronger US Dollar. This was attributed to the positive economic growth outlook in India, as well as the significant foreign inflows into the country. With expectations of continued policy reforms following the general elections in India, the Rupee has shown strength, despite challenges such as the rise in crude oil prices.
Investors are closely monitoring the US Chicago Fed National Activity Index, Dallas Fed Manufacturing Business Index, and a speech by the Fed’s Mary Daly. These events can have an impact on the USD/INR pair, especially with the recent strong performance of the US economy. Additionally, the Reserve Bank of India’s Monetary Policy Committee minutes highlighted the importance of maintaining disinflationary policies to control inflation and ensure economic stability.
India’s HSBC Manufacturing PMI data for June showed an improvement from the previous month, reflecting a positive trend in the sector. Similarly, the Services PMI also increased, surpassing market expectations. On the other hand, the US S&P Composite PMI saw a slight increase in June, with both Manufacturing and Services PMI exceeding the anticipated figures. However, US Existing Home Sales in May fell short of expectations, indicating a slight contraction in the housing market.
Despite the recent strength of the Indian Rupee, the USD/INR pair maintains a bullish bias on the daily chart. The 100-day Exponential Moving Average (EMA) is a key support level, suggesting that the pair is more likely to continue its upward trajectory. However, the immediate resistance level is at 83.75, with a potential move towards the psychological level of 84.00. On the downside, support is expected at 83.43, with a crucial level at 83.30-83.35, which could act as a resistance-turned-support zone.
Looking at the percentage change of the US Dollar against major currencies, it is evident that the currency was weakest against the Japanese Yen. This can be observed in the heat map, which shows the percentage changes of major currencies against each other. The data provides insights into the relative strength of the US Dollar in comparison to other global currencies.
The Indian Rupee has shown resilience in the face of the stronger US Dollar, driven by positive economic indicators and significant foreign inflows. While challenges such as rising crude oil prices remain a concern, the Rupee’s performance is closely tied to key economic events and policy measures. Investors will continue to monitor these factors to gauge the trajectory of the USD/INR pair and the overall currency market dynamics.