The Indian Rupee (INR) weakens to its lowest level on record for the eighth consecutive day, driven by the strong US Dollar (USD) and worries about India's economic slowdown. The Reserve Bank of India (RBI) might intervene to support the INR, while traders await the US December ISM Manufacturing PMI for market direction.
The Indian Rupee (INR) continues to weaken on Friday, reaching its lowest level on record for the eighth consecutive session. The ongoing strength of the US Dollar (USD) and concerns about India's economic slowdown are contributing to the INR's decline. Heavy USD demand in the non-deliverable forward (NDF) market is widening the arbitrage with the Indian onshore market.
Additionally, a slowing growth rate in India, a wider trade deficit, and reduced capital inflows are putting downward pressure on the INR. The Reserve Bank of India (RBI) may intervene by selling USD to provide short-term support for the INR. Traders are watching for fresh cues from the US December ISM Manufacturing Purchasing Managers Index (PMI), due on Friday, and a speech later in the day by Federal Reserve Bank of Richmond President Thomas Barkin. State-run banks reportedly sold USD worth $800 million to $1 billion to stem the decline. The Indian HSBC Manufacturing PMI fell to a 2024 low of 56.4 in December from 57.4 in November, weaker than the expected 57.8. This indicates a softer end to 2024 for India's manufacturing activity and a possible slowdown in the industrial sector
Indian Rupee USD Strength Economic Slowdown RBI Intervention US ISM PMI
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