Indian Rupee gains traction from RBI’s late intervention, ongoing Middle East conflict, higher oil prices eyed

• Indian Rupee gains ground amid global uncertainty and risk-off mood.
• The escalating geopolitical tension between Israel-Hamas, higher crude oil prices might cap the upside of the Indian Rupee.
• The Reserve Bank of India's October bulletin showed economy is anticipated to further strengthen through the rest of the year.

The Indian Rupee (INR) trades strongly against the US Dollar (USD) on Friday. The stronger note of INR is bolstered by the Reserve Bank of India (RBI)'s potential aggressive intervention late in the previous session. The Dollar sales from the Reserve Bank of India (RBI) likely counterbalanced the impact of the risk aversion prompted by the escalating conflict in the Middle East. Moreover, a rise in US Treasury yields and higher crude oil prices might also have contributed to the risk-off environment and cap the upside of the Indian Rupee.

Growth in the Indian economy is anticipated to gain momentum through the rest of the year, especially from festival spending, the Reserve Bank of India's October bulletin showed Thursday. Traders will keep an eye on India’s FX Reserve and RBI Meeting Minutes, due later on Friday. Furthermore, traders will take more cues from the Fed officials' speech, including Logan, Mester, and Harker in the absence of top-tier economic data releases from the US.

Daily Digest Market Movers: Indian Rupee gains traction amid the uncertainty

• RBI Chief Shaktikanta Das stated that the central bank does intervene in the forex market, but only to prevent excessive volatility of the Indian Rupee.
• RBI Chief Shaktikanta Das emphasized that the central bank is keeping a close eye on the evolving inflation dynamic amid the uncertainty on food inflation.
• India's Finance Minister will monitor the impact of ongoing tensions in the Middle East on the supply chain. 
• The Indian government is uneasy with the settlement currency, yuan, as Indian refiners have used yuan to pay for some oil from Russian sellers.
• The RBI's October bulletin showed growth is expected to gain momentum through the rest of the year.
• In August, the Reserve Bank of India (RBI) sold a net $3.86 billion in the spot foreign exchange market.
• The US Initial Jobless Claims dropped to 198K for the week ending October 14, the lowest level since January 2023.
• Existing home sales fell 2.0% MoM in September, the lowest level since October 2010.
• Fed Chair Jerome Powell signaled a desire to pause rate hikes and will watch how economic data develop in the coming months.
• The US Building Permits for September dropped to 1.475 million in September, above the estimated 1.45 million.
• The US Housing Starts for the same period climbed to 1.35 million, falling short of the market consensus of 1.38 million.
• The Federal Reserve’s Beige Book update showed the US economic outlook had "little to no change" between September and early October.
• US Retail Sales grew 0.7% MoM in September, beating the market estimation of 0.3%. Retail Sales Control Group rose by 0.6% MoM from 0.2% in the previous reading.
• The Indian Wholesale Price Index (WPI) arrived at -0.26% YoY in September from the previous reading of 0.52%, below the market expectation of 0.50%.

Technical Analysis: Indian Rupee holds positive ground above the 83.00 area

Indian Rupee remains firm against the US Dollar (USD) this week. The USD/INR pair trades within a narrow range of 83.15-83.30 and finds support above the 83.00 psychological round mark. Any follow-through selling below the latter could see a drop to 82.82 (low of September 12). On the flip side, a high of October 12 at 83.40 acts as an immediate resistance level for the pair. The next barrier to watch is the all-time highs around 83.45, followed by a psychological figure at 84.00. The USD/INR pair holds above the 100- and 200-day Exponential Moving Averages (EMA) on the daily chart, which hints that further upside looks favorable.