USD/INR trades broadly stable while investors await India-US deal confirmation
- The Indian Rupee trades stably against the US Dollar, awaiting the India-US trade deal announcement.
- Investors turn cautious as the US tariff deadline on July 9 looms large.
- The US NFP report showed that private sector hiring slowed significantly in June.
The Indian Rupee (INR) consolidates against the US Dollar (USD) on Friday as investors await the confirmation of trade agreement betwen India and the United States (US).
At the press time, the USD/INR pair trades sideways around 85.55. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, slid slightly below 97.00. Meanwhile, US markets will remain closed on Friday on account of Independence Day.
The outlook of the Indian currency remains firm as the US and India are expected to strike a trade agreement before the expiration of the tariff deadline on July 9.
A report from the NDTV showed on Thursday that India and the US can announce a trade agreement within "48 hours". The report also highlighted that both nations aim to bring overall duty barriers down to promote a healthy competitive environment. However, New Delhi aims to safeguard its agriculture sector and labor-intensive companies, such as leather, footwear, and clothes, from getting exposed to competition from US companies.
The comments from US President Trump on Wednesday also indicated that the deal will allow US companies to compete in India. “I think we are going to have a deal with India. And that is going to be a different kind of a deal. It is going to be a deal where we are able to go in and compete. Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much lower tariffs,” Trump said, ANI News reported.
Meanwhile, Indian bourses continue to face sell-off from Foreign Institutional Investors, which are expected to have been lightening their positions ahead of the July 9 tariff deadline. FIIs have been sellers in the first trading days of July and have sold Rs. 5012.95 crores worth of equities.
During last trading hours both Nifty and Sensex trade slightly lower as investors await developments on trade negotiations between the US and its trading partners.Ahead of the tariff deadline, US President Trump has stated that he will send letters to those nations with whom a trade agreement has not been finalized, outlining additional import duty rates.
Daily digest market movers: Indian Rupee flattens against US Dollar
- The Indian Rupee remains broadly stable against the US Dollar on Friday, while the former resumes its downside journey after a short-lived recovery in the aftermath of the United States (US) Nonfarm Payrolls (NFP) report for June, released on Thursday.
- The USD Index attracted bids on Thursday after the US NFP report showed a higher-than-projected addition of workers. US employers hired 147K job-seekers, significantly higher than estimates of 110K and almost flat around May’s reading of 144K, which were revised slightly higher.
- However, the report showed that workers added in the private sector were mere 74K, almost half of 137K recorded in May and way below if compared to the three-month average of 115K. According to the data, higher job numbers arrived due to robust hiring in the public sector, which added 73K workers against 7K in May.
- The NFP report clearly reflects that the private sector is refraining from adding new workers amid uncertainty surrounding the tariff policy imposed by President Donald Trump after his return to the White House.
- This week, Nela Richardson, chief economist at ADP, also stated that a “hesitancy to hire” and a “reluctance to replace departing workers” led to job losses last month. Her comments came after the ADP reported on Wednesday that private businesses laid off 33K employees in June.
- Deteriorating labor market conditions are unlikely to allow Federal Reserve (Fed) officials to take more time to assess the impact of Trump’s tariff policy on inflation. Lately, a few Fed policymakers have argued in favor of lowering interest rates sooner to support the labor market.
- "The Fed should not wait for the job market to crash in order to cut rates," Fed Governor Christopher Waller said in an interview around the last week of June.
- Meanwhile, traders have pared Fed dovish bets on upbeat NFP data. According to the CME FedWatch tool, the probability of the Fed to cut interest rates in July has diminihsed to 4.7% from 23.8% seen a day prior to the US NFP data release.
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.11% | -0.04% | -0.39% | 0.07% | 0.35% | 0.14% | -0.21% | |
| EUR | 0.11% | 0.11% | -0.27% | 0.21% | 0.33% | 0.24% | -0.07% | |
| GBP | 0.04% | -0.11% | -0.37% | 0.10% | 0.24% | 0.13% | -0.18% | |
| JPY | 0.39% | 0.27% | 0.37% | 0.48% | 0.61% | 0.46% | 0.08% | |
| CAD | -0.07% | -0.21% | -0.10% | -0.48% | 0.13% | 0.03% | -0.27% | |
| AUD | -0.35% | -0.33% | -0.24% | -0.61% | -0.13% | -0.14% | -0.42% | |
| NZD | -0.14% | -0.24% | -0.13% | -0.46% | -0.03% | 0.14% | -0.31% | |
| CHF | 0.21% | 0.07% | 0.18% | -0.08% | 0.27% | 0.42% | 0.31% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Technical Analysis: USD/INR stays below 20-day EMA
The USD/INR pair oscillates well inside Thursday’s trading range at open on Friday. The pair faced a sharp selling pressure on Thursday after breaking below the tight range formed between 85.56 and 86.00 in the June 30-July 2 period.
The near-term trend of the pair remains bearish as it stays below the 20-day Exponential Moving Average (EMA), which trades around 85.70.
The 14-day Relative Strength Index (RSI) stays below 50.00, indicating that the trend is on the downside.
Looking down, the May 27 low of 85.10 will act as key support for the major. On the upside, Wednesday’s high of 86.13 will be a critical hurdle for the pair.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
