Indian Rupee settled with a minor loss- CPI, WPI will drag volatility next week
The Indian rupee had a neutral trade last week, and settled with a minor loss against the dollar.
The rupee reached this week’s low of 81.62 on the back of comments by U.S. Federal Reserve Chair Jerome Powell that opened the door to a larger 50 basis points rate hike at this month’s meeting. U.S. yields and the dollar index jumped on Powell’s comments.
Dollar index inched higher towards 105.883, highest levels since 2 January 2023, following the Fed testimony last week.
However, the rupee managed to recover, helped by persistent dollar sales by a large foreign bank, likely on behalf of its custodial and offshore clients, according to traders.
Next week, India CPI, WPI, Trade Balance, Exports & Imports Data to Release which will drag volatility in Rupee.
India will release its consumer price index (CPI) data for February 2023 on Monday, setting up the stage for what to expect and the next course of action for the country’s central bank, Reserve Bank of India in its upcoming monetary policy meeting scheduled in early April. forecast is at 6.35%, from previous reading of 6.52%.
The country will also release its wholesale price index (WPI) inflation figure for February 2023 on Tuesday, another important economic indicator. Investing.com estimates WPI inflation to ease too in Feb compared to the preceding month. Data foreseen at 4.0%, from previous reading of 4.73%.
India will release its exports, imports and trade balance figures too on Tuesday, March 14.
Technical View
Looking at the above chart, since 27 February 2023, the USDINR pair has continued trading on the downside. Pair dropped from the high 82.9450 and recently made a low 81.62.
Further, the pair is trading in a symmetrical triangle pattern, which has a crucial support at 80.95 and massive resistance at 83.20. Hence, it’s expected that, pair may consolidate in between the above range unless it gives either side a break.
On the downside, immediate support is seen at 81.60 a break below appears to test next support 81.35-81.10. From which, possible pullback could be expected (if the pair is unable to break crucial support 80.95).
Sentiment expects to remain favorable for USDINR amid ongoing, global jitters, strength in dollar index and weakness in Asian currencies.