USD/INR trades with mild losses, eyes on India’s Union Budget – Crypto News – Crypto News
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USD/INR trades with mild losses, eyes on India’s Union Budget – Crypto News

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  • The Indian Rupee edges higher in Tuesday’s early European session. 
  • India’s FM Nirmala Sitharaman presented a Budget with focus on taxes and jobs.
  • Persistent foreign inflows to India and lower crude oil prices might support the INR in the near term. 
  • Investors await the US Existing Home Sales and Richmond Fed Manufacturing Index later on Tuesday. 

The Indian Rupee (INR) recovers some lost ground on Tuesday after falling to an all-time low in the previous session. India’s Finance Minister Nirmala Sitharaman presented her seventh consecutive Union Budget 2024-25 on Tuesday at the Budget Session of Parliament. The INR edges higher as markets expect the Union Budget 2024 could help boost consumption in the economy. Additionally, strong inflows into the Indian equity markets and a decline in crude oil prices might underpin the INR in the near term. 

Nonetheless, a weak Chinese Yuan, and sustained US Dollar (USD) demand from local corporates and oil companies might continue to undermine the INR. The downside of the Indian Rupee might be limited as the Reserve Bank of India (RBI) is likely to intervene to support the local currency against depreciation.

Market players will keep an eye on the US Existing Home Sales and Richmond Fed Manufacturing Index on Tuesday. Later this week, attention will shift to the preliminary US S&P Global Purchasing Managers Index (PMI) for July, Gross Domestic Product (GDP) for the second quarter and the Personal Consumption Expenditures Price Index (PCE) data for June, which will be released on Wednesday, Thursday and Friday, respectively. 

Daily Digest Market Movers: Indian Rupee rebounds after India’s Union Budget

  • Finance Minister Nirmala Sitharaman said that inflation continues to be slow and stable amid significant downside risks to growth and upside risks to inflation.
  • Finance Minister announced a provision of 1.52 trillion Rupees for agriculture and allied sectors and a provision of 2.66 trillion Rupees for rural development. 
  • The Indian government will also allocate 2 trillion rupees ($24 billion) for job creation over the next five years and will provide incentives to both employees and employers in the manufacturing sector. 
  • India’s foreign exchange has risen by nearly $15 billion in the first half of July, reaching a historic high of $667 billion.
  • “The upcoming Union Budget is expected to provide a strong outlook for the rupee, as it will outline India’s income and expenditure roadmap for the next year. The rupee remains broadly range-bound between Rs 83.25 a dollar and Rs 83.80 per dollar,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
  • The Indian economy is likely to grow by 6.5% to 7% this year, with prospects of clocking 7%-plus growth in coming years, according to the Economic Survey for 2023-24. 
  • New York Fed President John Williams and Fed Governor Christopher Waller noted that the US central bank is getting “closer” to where it wants to be in terms of rate cuts. 
  • Traders in Fed Funds Futures markets have fully priced in rate cuts in September, with at least two quarter-point cuts in 2024. 

Technical analysis: USD/INR maintains a positive outlook in the longer term

The Indian Rupee trades with mild gains on the day. The USD/INR pair keeps the bullish vibe on the daily timeframe as it confirms a breakout above the month-long trading range and holds above the key 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) points higher above 60.00, suggesting that some bullish momentum may be in play.

The first upside barrier for the pair is located near the all-time high of 83.77. A break above this level could be enough to spur some buyers to the 84.00 psychological level. 

On the other hand, consistent trading below the resistance-turned-support level at 83.65 may draw in enough selling pressure to drag USD/INR lower to 83.51, a low of July 12. Further south, the pair might gain enough downside momentum to revisit 83.40, the 100-day EMA. 

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   0.05% 0.09% 0.05% 0.14% -0.24% 0.18% -0.02%
EUR -0.05%   0.04% 0.01% 0.09% -0.31% 0.14% -0.05%
GBP -0.09% -0.03%   -0.03% 0.05% -0.35% 0.10% -0.09%
CAD -0.05% -0.01% 0.04%   0.09% -0.31% 0.12% -0.06%
AUD -0.13% -0.08% -0.04% -0.08%   -0.38% 0.06% -0.14%
JPY 0.25% 0.32% 0.34% 0.33% 0.40%   0.44% 0.26%
NZD -0.17% -0.14% -0.10% -0.14% -0.05% -0.45%   -0.19%
CHF 0.00% 0.05% 0.09% 0.06% 0.15% -0.26% 0.19%  

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).

 

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