Indian rupee faces downward pressure amid Asian losses, key resistance challenge

Reserve Bank of India headquarter. [File Photo]

The Indian rupee is anticipated to experience a downward trend on Wednesday, influenced by losses observed in other Asian currencies and its inability to surpass a crucial resistance level, Reuters reported,

Forecasts from non-deliverable forwards suggest that the rupee may open slightly weaker against the US dollar, following the previous session’s closing rate of 82.8975. Traders emphasise the significance of the 82.80-82.85 range, considering it a pivotal level for the currency.

Despite reported inflows, the rupee has struggled to make headway beyond the mentioned resistance. Some traders speculate that the Reserve Bank of India might be actively acquiring dollars in recent sessions.

On the global front, Asian currencies are generally on a downward trajectory, while the dollar index remains just below the 104 mark. The impact of weaker-than-expected US durable goods and consumer confidence data on the dollar seems limited, with US orders for durable goods experiencing a 6.1% decline last month, surpassing economists’ forecasts.

Analysts from ING Bank describe the US durable goods data as “messy” but note that various core elements and capital shipments figures weren’t soft. Market attention now turns to the upcoming US core Personal Consumption Expenditures (PCE) release.

This follows higher US inflation data for January, leading investors to recalibrate expectations for interest rate cuts this year. The current pricing reflects 80 basis points of anticipated rate cuts, significantly lower than the 175 bps priced in around mid-January.

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