Rupee Pushes Slightly Higher Due to Waning Dollar

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The Indian rupee is set to outperform the dollar today amid a weakening dollar and drop in gas prices, along with some positives in the equity and domestic markets. The USD/INR pair, which has remained largely in the correction zone in the last couple of weeks, is experiencing knee-jerk reactions, with analysts expecting it to push towards 79.30. In the long run, however, analysts expect the pair to meet resistance at 79.95, awaiting impetus from market players. 

Investors now turn their attention to the inflation report from the Euro Zone and the Core PCE index report from the US, which is expected sometime today for fresh direction. Early trading sessions on Friday saw the rupee climb by 26 paise to 79.65. Although the USD/INR pair has taken a breather after rallying during the Asian trading session, the rupee is set to finish ahead of the dollar today, its best performance after trailing the dollar for many previous weeks. 

The dollar index has continued to correct after surging to a two decades high earlier this month. Despite its weakening strength, the dollar appreciated by 0.12% to 106.58.

Analysts tracking the USD/INR stated that the pair could edge lower by another 15 paise from the previous close amid a rebound in risk assets supported by institution demand. 

The fate of the falling rupee

The Indian rupee has performed poorly in the last couple of months against the dollar. Its performance in the previous few weeks has been linked to the 2018 performance, which saw the rupee trail the dollar for seven straight months. While the rupee’s 2018 performance was primarily impacted by the US-China trade war and tightening financial conditions, the rupee’s 2022 poor performance has been attributed to slower growth and rising inflation. 

While the rupee regained some ground during Friday’s session, USDINR edged lower by 0.18% to 79.76 on Thursday, its worst one-day performance since May 20. There have been calls from several quarters for the government to do something about the rupee’s performance. But until now, the government hasn’t made any concrete move to support the rupee. 

Nitish Vaibhav
Nitish Vaibhavhttp://thetradingbay.com
Nitish Vaibhav is the Founder of the The Trading Bay. A computer science engineer turned an Entrepreneur 5 years ago. He has been in trading since 4 years in Forex and Crypto using his price action strategies. Involved in Content Creation full time for 3 years, Nitish is top rated writer on many content writing websites. He is also a YouTuber in India making videos about Crypto and Forex.

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