Swissquote Bank Research Team
Swissquote Bank Ltd
USD/INR hit its historic high: currently at 69.83, it is expected to trade sideways near the 70 psychological resistance level. The Reserve Bank of India (RBI) decision to raise its Repo Rate for a second consecutive time on 1 August appears to have paid off. The decision was taken amid strong economic growth (GDP 7.40% for 2018) and increasing inflation numbers that are strongly driven by oil price volatility and INR weakness. Headline inflation in July remains at 4.17%, a slowdown from May’s 5%.
As the Turkish lira is spooking emerging market currencies, the RBI will remain attentive and safeguard economic welfare by raising rates at its 4 October meeting. Additionally, core inflation in July remains at 6.29% (prior: 6.29%), too high for the RBI’s liking.
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This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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