USD/INR Rupee Recovers but RBI Issues a No Intervention Statement

The Rupee broke a three session losing streak and trades at 60.21 on strong Asian stocks. The European Central Bank and the Bank of England left rates untouched, but issued forward guidance statements on keeping rates low. This boosted an emerging market recovery as investors will have to look for yield. The INR was further influenced by merger and acquisition inflows.

USD/INR Daily Forex Graph for July 4th, 2013
The Reserve Bank of India Governor Duvvuri Subbarao made some comments regarding the currency after the CB board meeting. He stuck to reiterating the RBI’s mandate of price stability, growth and financial stability. Regarding INR volatility he denied having a price target as well as a band. His lack of defence of the currency weakened as investors sold it despite trading near record lows.

USD/INR Weekly Forex Graph for July 4th, 2013

The market will be watching for the US Non Farm Payrolls report release on Friday. The forecast figure is around 160k new jobs added to the US economy. If the final print beats expectations further INR weakness is expected as the Fed has signalled a recovery in employment will trigger QE tapering.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza