USD/INR trades flat on the weaker US Dollar, RBI rate decision eyed
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The Indian Rupee (INR) is trading flat against the US Dollar (USD) despite the weaker USD. India's services sector expanded at its fastest rate in six months, with the S&P Global India Services Purchasing Managers' Index (PMI) surging to 61.8 in January. The Reserve Bank of India (RBI) interest rate decision on Thursday will be the highlight of the week. The RBI is expected to keep the repo rate unchanged at 6.5%. The Indian economy has shown resilience amid high inflation and geopolitical conflicts in the Middle East. The OECD raised India's growth outlook for 2024-25 to 6.2%. The Indian government plans to trim the budget deficit to less than 4.5% by FY26. Technical analysis suggests that the USD/INR pair is in a descending trend channel, with support at 82.70 and resistance at 83.20. The US ISM Services PMI rose to 53.4 in January. The US Dollar price today shows a mixed performance against major currencies. The key factors driving the Indian Rupee include the price of crude oil, the value of the US Dollar, and foreign investment. The decisions of the RBI and macroeconomic factors such as inflation, interest rates, GDP, and the balance of trade also influence the value of the Rupee. Higher inflation is generally negative for the currency, but higher interest rates can be positive. The US economic outlook continues to improve.
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