USD/INR: Rupee hits fresh 2-month tops near 69.55

• Rupee buoyed by strong foreign inflows into shares, seasonal factors and softer DXY.
• Will the USD/INR decline last ahead of the US CPI release?

The Indian National Rupee (INR) extended its winning streak versus the  US dollar into a sixth day today, knocking-off the USD/INR cross to the lowest levels since January, 7^th at 69.56. At the press time, the cross managed to bounce-off lows to now trade at 69.62.

The latest leg up in the Indian currency can be mainly attributed to surging foreign investment flows into the Indian stock markets amid increased odds of Prime Minister (PM) Narendra Modi returning to power for the second term, as the nation heads for polls in May.  

The grind lower in the USD/INR pair is also on the back of broad-based US dollar weakness, as markets expect the US CPI figures to support the Fed’s patience stance while reports of fresh US-China trade talks also weighed down on the safe-haven greenback.

“In addition, most exporters bring back their dollars to India towards the end of the fiscal year to settle their annual accounts and repayment of debts which increases inflows,” Reuters noted. As a result, the seasonal “March factor is also a catalyst in the Rupee upsurge.

Looking ahead, markets remain focussed on the USD dynamics heading into the US CPI report for further trading momentum.

USD/INR Technical Levels