It appears that the Indian Rupee (INR) has failed to take advantage of the weakening greenback as the currency keeps sliding. Consequently, the USD/INR pair is now having its third consecutive green day which suggests the dollar to Indian rupee exchange rate may be poised for a new all-time high soon.
This price action of the USDINR pair is due to persistent demand from the importers. The recent surge in global oil prices and a potential supply tightening are also weighing on the rupee.
On Tuesday, the pair opened lower but showed minor gains till press time. The price action comes as the dollar extended its losses against the global currencies. The DXY index which tracks the dollar’s strength, slid 0.13% during its London session on Tuesday.
As shown in the following chart, USD/INR has broken out of 83.28 resistance and the bulls are now targeting fresh yearly highs. However, there is a strong chance of a pullback from current levels if the oil prices correct in the coming days.