• Indian Rupee remains relatively quiet ahead of the FOMC meeting.
• A pullback in US Treasury bond yields and lower oil prices lift the Indian Rupee on Tuesday.
• Federal Open Market Committee’s (FOMC) interest rate decision will be closely watched by traders.

Indian Rupee (INR) trades flat on Tuesday amid multiple challenges. A pullback in US Treasury bond yields and lower oil prices lift the INR on the day. Nonetheless, the equity outflows might exert pressure on the INR as overseas investors sold $1.67B in Indian equities in October. Additionally, the challenges from the Middle East geopolitical tension might boost safe-haven assets like the Greenback and act as a tailwind for the USD/INR pair.

Investors will monitor India’s Fiscal Deficit and Infrastructure Output data for September on Tuesday. The spotlight this week will be the highly-anticipated Federal Open Market Committee’s (FOMC) interest rate decision on Wednesday. The markets anticipate the central bank to leave the interest rate unchanged at its November meeting.

Daily Digest Market Movers: Indian Rupee remains sensitive to the geopolitical factors and risk sentiment

• Market players will monitor whether the RBI starts selling bonds via open market operations (OMO) this week as liquidity improves.
• India’s foreign exchange reserves declined by $2.36B to $583.53B for the week ending October 20, according to the RBI.
• The US Dallas Fed Manufacturing Index fell to -19.2 in October from -18.1 drop in September.
• The US Core Personal Consumption Expenditure Index (PCE) arrived at 3.7% YoY in September from 3.8% in the previous reading, matching the market expectation, the headline PCE came in at 3.4% YoY vs the estimation of 3.4%.
• The Michigan Consumer Confidence Index improved to 63.8, better than expected.
• UoM inflation expectations for a one-year period are expected to grow by 4.2%, while for a five-year period are expected to remain steady at 3.0%.
• Foreign investors sold $1.67B in Indian equities in October, which might weigh on the Indian Rupee.
• RBI will continue to keep an eye on maintaining inflation at the 4% target.
• RBI forecasted that India’s GDP would grow at a 6.5% annual rate in the current fiscal year.
• The International Monetary Fund (IMF) revised up its forecast growth rate for India to 6.3% in October.
• India’s Wholesale Price Index (WPI) for September, a gauge of inflation, dropped -0.26% YoY versus 0.52% prior, below the market consensus of 0.50%.

Technical Analysis: The Indian Rupee trades flat with a slight negative bias

The Indian Rupee trades around a flatline on the day. The USD/INR pair remains confined within a range of 83.00–83.35. The upward outlook of USD/INR remains intact as the pair holds above the 100- and 200-day Exponential Moving Averages (EMA) on the daily chart.

Any decisive follow-through buying above the upper boundary of the trading range of 83.35 will see a rally to year-to-date (YTD) highs of 83.45. Further north, the next upside barrier at a psychological round mark at 84.00. On the flip side, the key support level is seen at 83.00, representing the confluence of a low of October 20 and a round mark. A breach below the 83.00 mark could see a drop to 82.82 (low of September 12), en route to 82.65 (low of August 4). 

US Dollar price in the last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies in the last 7 days. US Dollar was the strongest against the Swiss Franc.

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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).