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USD/INR likely to rise above 65.0 from May, retreat post June’s FOMC meeting: Scotiabank

The USD/INR currency pair is expected to rise above 65.0 from May till June’s Federal Open Market Committee (FOMC) meeting and to retreat post the Federal Reserve’s June gathering. The pair is likely to consolidate at around 64.5 for now due to the Reserve Bank of India’s (RBI) two-way operations.

Foreign investors have pulled out funds from Indian equity markets after the RBI unexpectedly raised its reverse repo rate by 25 basis points to 6.00 percent on April 6, leading to a slightly weaker INR that underperform all regional peers except the KRW suffered from hovering geopolitical tensions. The 64.16 handle is now serving as a support level for USD/INR.

Since February 1, the INR has rallied on the back of the Union Budget with fiscal prudence, the RBI’s neutral monetary policy stance and increasing hopes for further economic reforms post the BJP’s victory in the UP assembly election. In the meantime, a broadly weakening dollar helped shore up the INR as well.

"We stay watching the result of the French presidential election that could be a game changer and are awaiting US Treasury Secretary Steven Mnuchin’s regulation relaxation due in June," Scotiabank commented in its latest research report.

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June 28 15:30 UTC Released

BRForeign Exchange Flows*

Actual

-5.279 bln

Forecast

Previous

-3.401 bln

June 28 14:30 UTC Released

BRBank Lending MM*

Actual

-0.2 %

Forecast

Previous

-0.2 %

June 28 19:00 UTC 189189m

ARBank Lending MM*

Actual

Forecast

1.9 %

Previous

0.8 %

June 28 21:00 UTC 309309m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

82 bln

June 28 23:50 UTC 479479m

JPForeign Bond Investment

Actual

Forecast

2.6 bln JPY

Previous

3.2 bln JPY

June 28 23:50 UTC 479479m

JPForeign Bond Investment

Actual

Forecast

Previous

1090.1 bln JPY

June 28 23:50 UTC 479479m

JPForeign Invest JP Stock

Actual

Forecast

Previous

-331.6 bln JPY

June 28 23:50 UTC 479479m

JPForeign Bond Investment

Actual

Forecast

Previous

1090.1 bln JPY

June 28 23:50 UTC 479479m

DERetail Sales YY

Actual

Forecast

2.6 %

Previous

3.2 %

June 28 23:50 UTC 479479m

JPForeign Bond Investment

Actual

Forecast

Previous

1090.1 bln JPY

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