USD/INR weakens ahead of RBI rate decision

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The Indian Rupee (INR) is trading stronger against the US Dollar (USD) and US bond yields are lower. The Reserve Bank of India (RBI) is expected to keep the key interest rates unchanged at 6.5% for the sixth consecutive time. Traders are awaiting the RBI interest rate decision along with the US weekly Initial Jobless Claims and a speech by Fed's Barkin. The RBI governor will announce the bi-monthly monetary policy, which is anticipated to maintain a status quo on the key interest rate. The RBI Monetary Policy Committee (MPC) is expected to keep the repo rate steady at 6.5% as inflation approaches the upper tolerance level of 6%. The RBI raised its economic growth forecast to 7% from 6.5% due to positive signs in the Indian economy. The RBI interest rate decision will be followed by attention on Indian inflation data and Industrial Production. The Indian Rupee is sensitive to external factors such as 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, economic growth rate, and the balance of trade also influence the value of the Indian Rupee. The USD/INR pair has traded within a descending trend channel of 82.70-83.20 and maintains a bearish outlook in the short term. The US Dollar price today shows a mixed performance against major currencies. The Indian Rupee is influenced by factors such as the price of crude oil, the value of the US Dollar, foreign investment, and the decisions of the Reserve Bank of India. Inflation impacts the Indian Rupee, with higher inflation generally being negative for the currency. The author and FXStreet do not provide personalized recommendations and the information provided is for informational purposes only.

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