The USD/INR pair edged lower on Thursday as traders positioned ahead of the Indian Purchasing Managers’ Index (PMI) data, which is expected to provide fresh insights into the country’s economic health. With investors closely monitoring signs of resilience or weakness in India’s manufacturing and services sectors, the rupee gained modest ground against the U.S. dollar.
The Indian rupee has remained relatively stable in recent sessions, supported by strong economic fundamentals and steady foreign capital inflows. However, any disappointment in the PMI data could reignite concerns about slowing growth, potentially reversing the rupee’s recent gains. A stronger-than-expected reading, on the other hand, could reinforce confidence in India’s economy and provide further support for the local currency.
Meanwhile, the U.S. dollar’s broader movement has played a key role in USD/INR’s recent fluctuations. While the Federal Reserve’s cautious approach on rate cuts has kept the greenback relatively firm, investors are awaiting key U.S. economic data that could influence market expectations. If U.S. inflation remains sticky or labor market conditions stay tight, the dollar could regain strength, pressuring the rupee.
Another factor influencing the rupee’s performance is the movement in global crude oil prices. India, a major oil importer, remains sensitive to fluctuations in energy costs. A sustained rise in oil prices could widen the country’s trade deficit and weigh on the rupee, while a pullback in crude prices could ease pressure on India’s external balance.
From a technical standpoint, USD/INR faces near-term support around 83.00, with a break below this level potentially triggering further downside for the pair. However, if dollar demand picks up again, resistance near 83.30 could cap any significant rebound.
For now, traders remain focused on Indian PMI data as a key determinant of near-term rupee direction. If the report signals continued economic strength, the rupee could extend gains, but any sign of weakness may revive dollar demand, keeping USD/INR volatility elevated.
