The rupee strengthened during the past week despite a steep decline in crude oil prices. Additionally, the rupee received support from large inflows into local equity markets and a reduction in the federal fiscal deficit of India. In response to Jerome Powell’s hawkish remarks, the dollar index increased slightly and reached its highest level in 20 years. Powell stated on Friday that the Fed will increase rates as high as necessary at the Jackson Hole central banking conference in Wyoming. Furthermore, positive U.S. economic statistics helped to strengthen the dollar.
Despite a sharp drop in the price of crude oil, the rupee gained strength over the past week. Large inflows into regional equities markets and a decline in India’s federal fiscal deficit also helped the rupee. The dollar index rose somewhat in response to Jerome Powell’s hawkish comments, reaching its highest level in 20 years.
At the Jackson Hole central banking conference in Wyoming on Friday, Powell declared that the Fed would raise interest rates as high as required. Positive U.S. economic data also contributed to the dollar’s rise. After tapping a support wedge at 79.45, the USDINR traded in an ascending triangular pattern before turning back toward the resistance level at 80.30.
This week, it is anticipated that the pair will trade in a range between the support level at 79.60 and the resistance level at 80.30. It is likely to trade between 80.30 and 79.60 levels up till it breaks the resistance wedge at 80.30 levels. The USDINR traded in an ascending triangular pattern before reversing course and heading back toward the resistance level at 80.30 after touching a support wedge at 79.45. The pair is expected to trade in a range between the resistance level at 80.30 and the support level at 79.60 this week. Up till it breaks the resistance wedge at 80.30 levels, it is expected to trade between 80.30 and 79.60 levels.