The Indian Rupee (INR) depreciated during Wednesday’s early European session, influenced by the recent terrorist attack in Kashmir. This incident has negatively impacted market sentiment, exerting downward pressure on the INR. However, sustained foreign fund inflows may mitigate further losses.
Recent economic data indicates positive trends, with the HSBC India Manufacturing PMI increasing to 58.4 in April, up from 58.1 in the previous month. Similarly, the Services PMI demonstrated improvement over the same period.
The INR’s decline is also attributable to rising crude oil prices and renewed demand for the US Dollar (USD). The aforementioned terrorist attack near Pahalgam, Jammu & Kashmir, which resulted in significant casualties, further contributed to the INR’s weakness.
Despite the positive PMI data, the INR remains subdued. Market participants are anticipating the release of the preliminary HSBC Purchasing Managers’ Index (PMI) for India and the flash S&P Global PMI report for the United States later in the trading session.
