General elections, inflation and growth slowdown as well as emerging market economies vulnerability remain the major factors for the second consecutive drop in the Reserve Bank of India (RBI) Current Rate. Yet INR should continue to face further pressure as a third rate cut appears practicable in June.
Indeed, although India’s budget deficit for fiscal year 2018/2019 ended 31 March 2019 meets fiscal deficit target of 3.4% amid spending cuts and a tax collection deficit of 1 trillion rupees ($14.44 billion) compared to target, the Indian economy is facing additional headwinds. Headline inflation has been ticking higher (2.86%) in February but still remains below its long-term target of 4% while the real gauge eased at 5.02% (prior: 5.29%). Furthermore, India’s GDP growth closed the last quarter of 2018 in its slowest pace in five quarters (GDP y/y 2018: 7.20%). It is therefore to observe whether PM Narendra Modi party Bharatiya Janata will be winning actual general elections closing in 19 May 2019 and whether current budget deficit target can be achieved despite election promises.
Stay on top of the markets with Swissquote’s News & Analysis
For now, USD/TRY is expected to rise further as uncertainties within Asia’s third largest economy remains. Heading along 69.38 short-term.
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.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.