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  • INR bulls fight back control, knock-off USD/INR
  • Indian election outcome due tomorrow – key focus

The Indian Rupee (INR) is seen reversing Tuesday’s pullback to near 70.00 levels against its American peer, knocking-off the USD/INR cross back towards the 69.60 region

The Indian currency regains poise heading into Thursday’s outcome of the general election. The optimistic outlook around the Rupee was painted after the exit polls” results showed that the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) is likely to win over 300 seats in India’s 543-seat lower house. The opposition, the Congress-led United Progressive Alliance (UPA), will win an estimated 132 seats, exit polls showed.

On the exit polls results, the USD/INR pair fell 0.7%, with the Rupee registering its biggest single-day gains since 19 March to close near a two-week high.  Meanwhile, the bond yields fell 8 basis points, the most since 2 April, to hit a seven-week low.  

Amid increased bets of incumbent Prime Minister Modi returning to power, the foreign fund inflows have aided the Rupee in the recent past.  “Indian markets  have been pricing in the return of the BJP government since tensions with Pakistan broke out in late February  and led to  a surge in support for PM Modi”, as cited by Reuters.

All eyes remain on the election outcome due tomorrow, a majority for BJP-led NDA is likely to be positive for the Rupee, but the upside will remain limited, as explained by FXStreet’s Analyst Omkar Godbole.

USD/INR Technical Levels