USD/INR: Rupee off monthly highs amid increased RBI rate cut calls

According to the India Economists at Bank of America Merrill Lynch (BAML), the Reserve Bank of India (RBI) is seen cutting the benchmark policy rates by 25 basis points in February, despite inflation seen at 6.70% in December.

Key Quotes:

“After all, the 'busy' industrial season will end by March. The MoF should also try to support demand in the February 1 Budget by running a higher fiscal deficit of 3.8%.

We continue to highlight that rising real lending rates are hurting growth. While nominal MCLR has fallen 43bp, on RBI easing, real MCLR has gone up 120bp on falling core WPI inflation.”

FX Implications:

Amid rising odds of an RBI rate cut next month, the Indian rupee loses ground to now trade near 70.90 vs. the US dollar, at the time of writing.

The USD/INR cross hit fresh monthly lows of 70.768 earlier today, as the US dollar remained on the back foot across the board, in the wake of weaker US payrolls data released last Friday.

USD/INR Technical levels to consider:


Today last price 70.9125
Today Daily Change -0.0285
Today Daily Change % -0.04
Today daily open 70.956
Daily SMA20 71.2897
Daily SMA50 71.3591
Daily SMA100 71.2969
Daily SMA200 70.4751
Previous Daily High 71.4025
Previous Daily Low 70.8485
Previous Weekly High 72.57
Previous Weekly Low 70.8485
Previous Monthly High 71.98
Previous Monthly Low 70.328
Daily Fibonacci 38.2% 71.0601
Daily Fibonacci 61.8% 71.1909
Daily Pivot Point S1 70.7355
Daily Pivot Point S2 70.515
Daily Pivot Point S3 70.1815
Daily Pivot Point R1 71.2895
Daily Pivot Point R2 71.623
Daily Pivot Point R3 71.8435



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