USD/INR stays above 71.00 as IMF blames India for downbeat growth forecasts
|- USD/INR trades near the seven-day high.
- IMF cuts the emerging market and developing economies’ growth forecast by 0.20%, cuts Indian growth estimation to 4.8%.
- Thomson Reuters/Ipsos portray weakness in Indian consumer confidence.
USD/INR takes the bids to 71.15 while heading into the European session on Tuesday. The pair recently benefited from the International Monetary Fund’s (IMF) latest growth forecast. Declines in Indian consumer sentiment also helped the pair to deviate from the previous day’s drop.
The IMF cites India as the largest contributor to the global headwinds that led the international institute to downwardly revise its growth forecasts. The Washington-based entity announced a 0.2% cut in the GDP forecast of the emerging market and developing economies from 3.7% in 2019 to 4.4% in 2020 and 4.6% in 2021. The organization also downsides India’s economic growth forecast to 4.8% from the 6.1% expansion it projected in October.
Also weighing on the Indian rupee (INR) could be the Thomson Reuters/Ipsos Index of Consumer Sentiment for January that nosedived 7.3%. This had negative impacts on the news that the government is planning to announce a law that will enable foreign investors to exclude tax demands.
The market’s risk tone remains heavy amid calls of China virus and Libyan commander’s rejection of the international push for peace. Traders might have ignored comments from China’s Commerce Ministry that they welcome competitive US products.
With this, the US 10-year treasury yields stay below 1.80% whereas the MSCI’s index of Asian-Pacific shares outside Japan dropping 1.3% to 702.60.
Investors will now focus on how the US traders will react to the weekend news as they return from the extended weekend. Also likely to affect the market’s risk tone will be US President Donald Trump’s impeachment hearing.
Technical Analysis
USD/INR prices are gradually moving towards 71.55 unless declining below the monthly low surrounding 70.58, which if broken could recall 70.00 to the charts.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.