- The Indian Rupee is showing positive momentum in early trading hours this Monday in Europe.
- The INR is receiving tailwinds from increased international investment and a drop in crude oil costs.
- Geopolitical unease between India and Pakistan could potentially limit the Rupee’s appreciation.
The Indian Rupee (INR) is strengthening in today’s session. Foreign Portfolio Investors (FPIs) are maintaining their buying streak in Indian stock markets, marking the seventh day of net purchases. This activity may provide a lift to the domestic currency relative to the US dollar in the short term. Additionally, the fall in crude oil prices is providing support to the INR, given India’s position as the world’s third-largest crude oil consumer.
Conversely, escalating tensions with Pakistan could incite risk aversion among market participants, potentially pushing the Indian currency downwards. The reported ceasefire breach along the Line of Control (LoC) occurred shortly after the tragic Pahalgam terror incident, which resulted in the deaths of 26 individuals, primarily tourists, in the Baisaran valley near Pahalgam, Jammu and Kashmir.
The US Dallas Federal Reserve Manufacturing Business Index for April is scheduled for release later today. The initial estimate for US Gross Domestic Product (GDP) for the first three months of the year (Q1) will be closely watched on Wednesday, preceding the US Nonfarm Payrolls (NFP) data, which is slated for release on Friday.
