USD/INR Soars To A 3-Month High Amid Strengthening Dollar
USD/INR pair has been rallying for the past few weeks. The forex pair has surged to its highest level since 19th May, a few days ago. Since 24 July, US dollar to Indian rupee exchange rate has risen by 1.37%. This shows that the Indian rupee is losing its value against the greenback.
After a 0.54% gain last week, USDINR is extending its gains this week. On Tuesday, the pair was trading at 82.78 at the start of its London session. This translates into a 0.06% gain for the day. Other major currencies like the British pound, Canadian dollar, and Euro are also facing headwinds due to the strengthening US dollar.
Is RBI Intervening In USDINR?
On Tuesday, the Indian rupee remained sideways in terms of the US dollar. Many analysts are calling it a sign of an intervention from the Reserve Bank of India (RBI). The central bank is expected to be offering dollars around 82.8 region to keep the exchange rate stable.
The ongoing rally in USD/INR can be attributed to the soaring DXY Index. The dollar strength index has risen above 102 points after another 25 bps rate hike in July 2023. The index will remain volatile in the next three days due to the release of the July 2023 CPI report on Thursday.
USD/INR Forecast Remains Stable
It is very hard to predict the price action of USDINR as the pair is significantly impacted by the RBI interventions. This is quite evident from the following chart, which shows a clear supply zone above 82.80. If it weren’t for the RBI interventions, Indian Rupee would have devalued a lot in 2022 when the DXY Index surged to 114.77 points.
In these circumstances, any USD/INR forecast might go out the window if RBI starts to offer dollars. Nevertheless, considering the past few month’s history, the pair will likely keep trading within the 80.50-80.28 range in the coming months.
In the meantime, I’ll keep sharing the updated USDINR forecast and my personal trades on Twitter, where you are welcome to follow me.