Indian Rupee to US Dollar (INR/USD) Exchange Rate Close to Eight-Month High
As India’s national elections edge closer, the Indian Rupee exchange rate is benefiting from the expectation that the opposition Bharatiya Janata Party will be victorious.
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With investors betting that the BJP will be able to boost India’s economy and promote growth, the Rupee’s appeal increased and the currency broadly strengthened.
In the view of one Mumbai-based industry expert; ‘Right now there’s euphoria and the rally is being driven by sentiment. The central bank will be closely monitoring the situation because if there’s any unfavourable election outcome, they will have to roll out the ammunition to stabilise the markets.’
The Rupee held on to gains against the US Dollar yesterday even as a measure of US consumer confidence surged from a positively revised 78.3 in February to 82.3 in March. Economists had been expecting a reading of 78.5.
Today however the Rupee could pare its advance against the US Dollar if US durable goods orders show the 0.8 per cent gain forecast by economists.
The increase would almost wipe out January’s 1.0 per cent drop in orders for durable produce.
The publication of the Federal Reserve’s capital analysis and review results will also be of interest.
In a recent report for Money Control, industry expert Nizam Idris intimated that if the Bharatiya Janata Party is elected and domestic inflation pressures continue to ease the Rupee could strengthen to 58 per Dollar in the mid-term.
Idris asserted; ‘I guess 60 Rupee per USD will be tested but question is where is the overshoot region. I think the currency will overshoot first and that is typical for currency appreciating in the hope of positive election result or in the hope of reform and then after the result and after reform becomes clearer then the market reassess the situation […] Therefore, 60 Rupee per USD will break.
‘I think it could go back to 68 Rupee per USD before proper reassessment of the market and after reform is done. I think it will break 60 Rupee per USD.’
Against the Pound, Rupee movement may be fairly limited until tomorrow and the release of UK retail sales data.
The GBP/INR paring has breached the 100 Rupee per Pound level and a disappointing sales report tomorrow could see Sterling fall further still.
The British Pound is currently trading against the Rupee in the region of 99.3693.
The US Dollar is currently trading against the Rupee in the region of 60.1400.