The Indian Rupee strengthens to 93.65 against the US Dollar, bolstered by Rs. 65,735.57 crore in November foreign inflows and lower oil prices, even as the DXY hits an 18-month high of 103.06.
USD/INR has slid to about 93.65, a fresh six-month low for the pair, as Foreign Institutional Investors made cumulative investments of Rs. 65,735.57 crore in November and remain net buyers on all trading days except the Diwali Muhurat session of November 08. Falling oil prices add support for the oil-importing economy, helping the Rupee outperform even as DXY hits an 18-month high near 103.06. RSI around 24 shows oversold conditions, so the decline could slow near 93.00.
DXY posts a fresh 18-month high at around 103.06 as markets price a bigger Federal Reserve hike in December after an upside CPI surprise. TD Securities says the data 'certainly seals a Dec rate hike' and the debate is between a catch-up 50bps move or 25bps with January follow-through. A possible exception is that the Rupee is outperforming despite this Dollar strength.
Oil prices are falling on hopes that the US and Iran would prefer a deal rather than renewing military attacks, with the MCX Crude Oil contract expiring November 19 down 2.42% to slightly below Rs. 8,000. This decline is a tailwind for net energy importers like India, supporting the Rupee.
The Indian Rupee continues to outperform, sliding to 93.65 against the US Dollar as strong foreign institutional investment flows into Indian equities. Despite the US Dollar Index reaching an 18-month high of 103.06 on expectations of a December Federal Reserve rate hike, the Rupee remains supported by falling crude oil prices and robust capital inflows.
Strong foreign inflows into Indian equities and lower oil prices are boosting the Rupee, letting it outperform even though the Dollar Index hit an 18-month high near 103.06, pushing USD/INR down to about 93.65.
The technical analysis points to a possible extension toward 93.00, with resistance at the 20-day EMA of 94.5812, though oversold RSI around 24 suggests the decline may slow.
The strong CPI upside surprise has made a December Fed rate hike all but certain, with markets debating whether the Fed will go 25 or 50bps, pushing the Dollar Index to a fresh 18-month high near 103.06.
Hopes that the US and Iran would prefer a deal rather than renewing military attacks are pulling prices lower, with the MCX crude contract expiring November 19 down 2.42% and trading slightly below Rs. 8,000.