Rupee under pressure despite dovish Fed minutes and downside bias persists
The Indian rupee is likely to start with little change, despite the U.S. Federal Reserve’s dovish minutes failing to provide a lift to Asian currencies. The 1-month non-deliverable forward (NDF) suggests the rupee (USDINR) will open close nearly unchanged from the previous session. The USD/INR pair has shown significant volatility this week, with the rupee recently experiencing a brief recovery. However, this respite was short-lived as the currency quickly reversed course, nearing its lifetime low. This downward pressure on the rupee has been driven by factors such as importer hedging and weak portfolio inflows, which have exacerbated the currency’s decline.
Read more to find out how will Indian rupee trend.
Disclaimer:
Given the Fed’s dovish stance, the dollar could face downward pressure, which might eventually provide some relief to the rupee. Nonetheless, the local currency remains vulnerable to external factors, especially if there is a further decline in global risk appetite or an escalation in geopolitical tensions. Traders are advised to prioritize proper risk management to make well-informed trading decisions.
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