USD/INR Exchange Rate Holds within Narrow Range ahead of Fed Minutes
As traders await the publication of the minutes from the most recent Federal Reserve FOMC meeting, the US Dollar is generally holding steady against the majority of its most traded currency competitors. A lack of Indian data has seen the Rupee generally decline against higher-yielding currencies.
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The US Dollar to Indian Rupee exchange rate is currently trending in the region of 61.3760.
A complete absence of American economic data on Monday and anxieties over an unjustified ‘Greenback’ (USD) value caused the US Dollar to soften from its world-beating position in the currency market.
Further declination took place on Tuesday evening after consumer credit was seen to fall beyond expectations.
US Consumer Credit was forecast to tick lower from $21.612 billion to $20.000 billion, but the actual result showed a fall to $13.525 billion.
Tuesday’s Indian data printed reasonably positively which provoked a Rupee uptrend. The HSBC Services PMI eclipsed the median market forecast of a rise from 50.6 to 50.8, with the actual result advancing to 51.6.
The US Dollar to Indian Rupee exchange rate has dropped to a low today of 61.2871.
Wednesday’s US economic data has been reasonably positive thus far, although the market seems to be holding off any major investment ahead of the Federal Reserve FOMC meeting minutes.
US MBA Mortgage Applications showed a huge gain from -0.2% to 3.8%. Growth in mortgages suggests a healthy housing market. Due to the multiplier effect housing has on the rest of the economy, rising activity also indicates increased household income and economic expansion.
A lack of Indian domestic data on Wednesday has seen the Indian Rupee generally depreciate against the majority of its peers. Trader risk aversion following soft Chinese data and cooling global economic growth has also aided the Rupee downtrend.
Forecast for the US Dollar to Indian Rupee Exchange Rate
The US Dollar’s position on Thursday is most likely to be dictated by the Fed minutes due for publication later on Wednesday evening. Traders will scrutinise the minutes very closely for clues as to the timing of monetary policy normalisation.
A lack of Indian data on Thursday is likely to see the Rupee continue trending lower.
Friday’s Indian data does however have the potential to provoke Rupee volatility. Industrial Production is forecast to increase by 1.1% on the year in August following a gain of 0.5% in July. Manufacturing Production is expected to decline by -2.5% after being down -1.0% in July year-on-year.
Rising tensions over the Ebola virus may also have a detrimental effect on trader risk sentiment which, in turn, will reduce the appeal of emerging-market currencies such as the Indian Rupee.