USD/INR attacks 71.00 as Rupee rises on corporate flows

The minor recovery attempts in USD/INR are seen facing supply near 71.20 region, sending back the rates to test the 71.00 level, where it now wavers.

The latest decline takes the price to the lowest levels in more than a month, mainly driven by the ongoing strength in the Indian rupee. The rupee remains buoyed by the latest upbeat comments from the Indian Chief Economic Adviser and likely corporate dollar inflows. The Indian Chief Economic Adviser said that India’s growth potential still remains high and that the government will step up efforts to revive growth.

Meanwhile, a dealer with a state-run bank said: “The rupee has had an appreciation bias in today’s session, owing to high corporate inflows, but large gains are capped as state-run banks have stepped up dollar buys, suspected on behalf of the RBI, as the current levels look attractive to enter.”

Further, broad-based US dollar correction from solid US jobs report led upsurge also adds to the downbeat tone seen around the cross. The US economy added 266,000 new jobs in November, the US Labor Department showed last Friday, the biggest gain since January.

The focus now shifts towards the Indian inflation and factory data and the FOMC monetary policy decision ahead of the looming US Dec. 15 tariffs on the Chinese goods.

USD/INR Technical levels to consider