US Dollar to Indian Rupee (USD/INR) Exchange Rate Weekly Forecast: US Data in Focus
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Last week was an exciting one for Rupee trading as the Reserve Bank of India (RBI) unexpectedly slashed its interest rate 25 basis points from 8.00% to 7.75%.
The move had been highly anticipated by many and confidence that further rate cuts will materialise in the near future is high.
RBI Governor Raghuram Rajan stated: ‘Once the monetary policy stance shifts, subsequent policy actions will be consistent with this stance.’
Although many suggest the rate cut was a surprise, the previous policy announcement on December 2nd saw hints that the RBI would reconsider rates if economic conditions improved. One aspect of the economy the RBI has kept a close eye on is India’s high inflation.
The move by the central bank also inspires confidence that inflation will keep edging lower in the near future.
However, this week will see very little Indian data emerge, leaving Rupee gains or losses largely dependent on global developments.
Meanwhile, the US Dollar has been trending higher against a host of other currency majors as investors speculate that the US Federal Reserve is inching closer to hiking interest rates.
US Dollar to Indian Rupee (USD/INR) Exchange Rate Forecast
This week is devoid of any major US data; however, there are several pieces that could cause moderate US Dollar exchange rate movement.
Tuesday will see the release of the NAHB Housing Market Index, which is expected to climb from 57 to 58 in January. In addition, Federal Reserve Board of Governors member Jerome H. Powell will also be speaking and could influence the US Dollar to Indian Rupee (USD/INR) exchange rate.
US MBA Mortgage Applications, Building Permits and Housing Starts ecostats will all emerge on Wednesday which could inspire some US Dollar movement.
Thursday’s weekly US employment data could also affect the ‘Buck’ if it overshoots forecasts as it did last week. Any unfavourable employment data can soften the US Dollar as the Federal Reserve has previously stated that improvement in the labour sector could be a factor to spur on interest rate hikes.
However, Friday is likely to be the most interesting day for US Dollar to Indian Rupee (USD/INR) exchange rate trading, with the release of Markit’s US Manufacturing Purchasing Managers Index (PMI) as well as Existing Home Sales, Leading Indicators and Chicago Fed’s Activity Index.
Any favourable figures could bolster the US Dollar against other currency majors while any negative ecostats could see the ‘Greenback’ tumble.
Meanwhile, India’s Deposit Growth, Foreign Reserves and Bank Loan Growth numbers are scheduled for release on Friday.
The US Dollar to Indian Rupee (USD/INR) exchange rate is presently trending in the region of 61.7030.