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    USD-INR Prediction

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    priitiikuumarii
    The document discusses the outlook for the previous week regarding the rupee depreciating against the dollar due to month end demand and FII outflows. December saw strong dollar inflows of $5.1 billion from overseas investors. The Bank of Japan meeting on interest rates is important for currencies. High domestic demand for the dollar hindered rupee gains despite a weak global dollar trend. The RBI is likely to maintain interest rates to control inflation.

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    USD-INR Prediction

    Uploaded by

    priitiikuumarii
    5 views2 pages
    The document discusses the outlook for the previous week regarding the rupee depreciating against the dollar due to month end demand and FII outflows. December saw strong dollar inflows of $5.1 billion from overseas investors. The Bank of Japan meeting on interest rates is important for currencies. High domestic demand for the dollar hindered rupee gains despite a weak global dollar trend. The RBI is likely to maintain interest rates to control inflation.

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    The document discusses the outlook for the previous week regarding the rupee depreciating against the dollar due to month end demand and FII outflows. December saw strong dollar inflows of $5.1 billion from overseas investors. The Bank of Japan meeting on interest rates is important for currencies. High domestic demand for the dollar hindered rupee gains despite a weak global dollar trend. The RBI is likely to maintain interest rates to control inflation.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    5 views2 pages

    USD-INR Prediction

    Uploaded by

    priitiikuumarii
    The document discusses the outlook for the previous week regarding the rupee depreciating against the dollar due to month end demand and FII outflows. December saw strong dollar inflows of $5.1 billion from overseas investors. The Bank of Japan meeting on interest rates is important for currencies. High domestic demand for the dollar hindered rupee gains despite a weak global dollar trend. The RBI is likely to maintain interest rates to control inflation.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
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    Outlook of previous week:

    Rupee depreciated on 26/12/23 amid month end dollar demand from importers and FII
    outflows. Meanwhile, sharp fall in rupee was prevented due to decline in crude oil prices and
    as dollar hovered near 5-month low after PCE price index data showed annual US inflation
    slowed further below 3% in November. The Indian rupee edged lower against the U.S. dollar
    on Tuesday, influenced by increased demand from local oil companies.

    Closing at 83.1925, it declined by 0.06%. Despite regional gains and a 10-year U.S. Treasury
    yield drop to 3.88%, the rupee faced pressure from robust dollar demand in the oil sector.

    December dollar inflows:

    December recorded the strongest monthly inflows of $5.1 billion from overseas investors, a
    trend influenced by updated Fed interest rate projections foreseeing a 75 basis points cut by
    2024. However, the dollar index rebounded on Friday as a key Fed member suggested
    caution in premature rate cuts.

    Bank of Japan Meeting:

    The Bank of Japan meeting on 19/12/23 is important for the currency market as any further
    potential surge in yen on ending the negative rates will add positive trend in emerging
    currencies including rupee as well.

    High Demand for Dollar Domestically:

    The rupee closed the past month with a slight 0.1% dip, reaching a record low of 83.39
    against the dollar. High demand for the dollar domestically hindered potential rupee gains,
    despite a weak global dollar trend. The USD/INR exchange rate is hindered by a supply-
    demand imbalance in the inter-bank, making a significant rupee surge unlikely. Importers are
    expected to act defensively around 83.10-83.15, anticipating year-end pressures.

    Euro-Zone Impact:

    The dollar index moderately rebounded from a three-month low, spurred by a drop in the
    euro after lower-than-expected November inflation in the Euro-zone.

    RBI’s Stance:

    The RBI is likely to maintain its 6.50% repo rate, prioritizing inflation control amid a robust
    domestic economy. Rising food prices are fueling renewed inflation concerns. The central
    bank may need to sustain high rates to meet its 4% inflation target. Watch for any
    announcements to improve the rupee forward curve for potential revival.

    Indian’s BoP:

    India's current account deficit narrowed more than expected in the July-September quarter
    largely due to a lower merchandise trade deficit while services exports also grew, the central
    bank said in a statement on Tuesday.
    The current account deficit stood at $8.3 billion, or 1% of GDP, in the second quarter of
    fiscal 2023/24 compared with $9.2 billion or 1.1% of GDP in the preceding quarter. The
    CAD had been at $30.9 billion or 3.8% in the same quarter a year ago.

    TA for Rupee as on Yesterday:

    Prediction for USD/INR Pair:

    With the year-end approaching, a limited trading range for the rupee is anticipated, ranging
    between 83.12 and 83.23 Forex traders said the lower greenback index weighed in favour of
    the local currency amid rising concerns over disruption in global trade through the Red Sea
    route.

    Rupee is likely to appreciate today amid soft dollar and decline in US treasury yields. Yields
    nosedive as recent inflation data bolstered expectations that US Federal Reserve will start
    cutting rates next year as soon as March. Additionally, improved economic data, optimistic
    domestic market sentiments and softening of crude oil prices will aid rupee.

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