- The Indian Rupee is showing signs of appreciation in the initial hours of Monday’s European trading.
- The INR is receiving tailwinds from increased foreign investment and a decrease in crude oil costs.
- Geopolitical unease between India and Pakistan may limit the potential gains of the Indian Rupee.
The Indian Rupee (INR) is exhibiting upward momentum on Monday. Foreign Portfolio Investors (FPIs) are maintaining their buying streak in Indian stock markets for the seventh day running. This activity could strengthen 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 generate a risk-averse environment among investors, potentially weakening the Indian currency. The breach of the ceasefire along the Line of Control (LoC) occurred shortly after the terror incident in Pahalgam, which resulted in the deaths of 26 individuals, predominantly 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 of US Gross Domestic Product (GDP) for the first quarter (Q1) will be closely watched on Wednesday, preceding the US Nonfarm Payrolls (NFP) data, expected on Friday.
