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

Dhwani Mehta FXStreet

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:

USD/INR

Overview
Today last price	70.9125
Today Daily Change	-0.0285
Today Daily Change %	-0.04
Today daily open	70.956

Trends
Daily SMA20	71.2897
Daily SMA50	71.3591
Daily SMA100	71.2969
Daily SMA200	70.4751

Levels
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

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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