- USD/INR remains near weekly highs but rally faces resistance.
- Greenback posts mix results on Friday after data.
The USD/INR rose earlier today to 71.25, reaching the highest level since December 6 but the pulled back. The area around 71.20 is offering resistance to the US dollar that is showing signs of exahustion after rising during five consecutive days.
Data released today from the US failed to boost the greenback that is posting mix results. Measured by the DXY, the US dollar is up 0.25% above 97.50, at the strongest level in a week. However, versus commodity and emerging market currencies is modestly lower for the day and the week.
The rupee is among the worst performers of the week, on the back of rising Indian fiscal and growth concerns. Analysts at CIBC, expect some modest near-term weakness in the INR, but for it to be contained to recent boundaries.
On a wider perspective, CIBC analysts argued the rupee was an underperformer compared to its regional peers throughout 2019, but they consider it can recover ground in 2020 against an expected softer dollar. “The stabilization of bond yields
should also help counter risks, but yields are relatively low, and we expect investors to be looking for higher yields and a softer INR to enter longs.”
Share
