INR Collapses to Lifetime Low Ahead of US CPI Data, Resistance Level & More
The Indian rupee extended its freefall for the third consecutive session, collapsing to a new lifetime low of 79.66 against the US dollar on Wednesday, compared to its previous close of 79.6. At the time of writing, the domestic traded at 79.64/$1.
Investors continued to sell riskier assets ahead of the US CPI inflation data due later in the day, as it would indicate the Fed’s stance of further tightening the monetary policy to tame the soaring inflation, exerting pressure on the local unit.
“Market players are juggling with mounting inflation and recession concerns, and central bankers are juggling to tame inflation without halting economic progress. Risk aversion is dominating the trading session as investors brace for June’s US CPI report,” said Kunal Sodhani, AVP, Global Trading Center, Treasury, Shinhan Bank India.
He believes that if the U.S. CPI number exceeds 9%, it could fuel the DXY rally and EUR/USD testing 0.9940 levels. “For USDINR, positionally 79.25 acts as a support while 79.80/80.00 a resistance,” the forex expert adds. Investors are continuing with the safe-haven appeal of the greenback amid China’s coronavirus reemergence, the EU energy crisis and growing recession fears. The US dollar index stood at the 107.95 level. Further, the foreign investors’ ongoing sell-off is also adding to the rupee’s slide. So far in 2022, FPIs have offloaded Indian equities worth over Rs 2.2 lakh crore.
Investors continued to sell riskier assets ahead of the US CPI inflation data due later in the day, as it would indicate the Fed’s stance of further tightening the monetary policy to tame the soaring inflation, exerting pressure on the local unit.
“Market players are juggling with mounting inflation and recession concerns, and central bankers are juggling to tame inflation without halting economic progress. Risk aversion is dominating the trading session as investors brace for June’s US CPI report,” said Kunal Sodhani, AVP, Global Trading Center, Treasury, Shinhan Bank India.
He believes that if the U.S. CPI number exceeds 9%, it could fuel the DXY rally and EUR/USD testing 0.9940 levels. “For USDINR, positionally 79.25 acts as a support while 79.80/80.00 a resistance,” the forex expert adds. Investors are continuing with the safe-haven appeal of the greenback amid China’s coronavirus reemergence, the EU energy crisis and growing recession fears. The US dollar index stood at the 107.95 level. Further, the foreign investors’ ongoing sell-off is also adding to the rupee’s slide. So far in 2022, FPIs have offloaded Indian equities worth over Rs 2.2 lakh crore.