Huge Capital Inflows Into the Market Triggered Breach of 74.30 Support in USD/INR – Investing.com India

Huge Capital Inflows Into the Market Triggered Breach of 74.30 Support in USD/INR – Investing.com India

Huge capital inflows from the second half of this month in the form of FPI, PE, and ECB/USD bond proceeds into the market triggered a sharp downside in the currency pair breaching the 74.30 support level. From the high of 76.31 in the currency pair on 16-12-21, it gradually declined by 2.63% as compared with the current level of 74.30.

The weakened globally due to improved risk sentiment as investors see a limited impact of the coronavirus Omicron variant on the economy. Amid higher oil prices, global yields are soaring again. The 2 over 10-year US yield curve further flattened to multi-month levels and that could be a positive sign for the from the second week of January 2022.

Gains for the domestic currency are seen capped as prices inched higher as data showed that the US crude and fuel inventories fell in the week ending 24-12-21. The rise in the during this week is also positive for the rupee. In the second week of January, we could see the traders betting for a stronger US dollar on Fed rate hike which could pressurize on the rupee. Overall, we are expecting the rupee to trade in the wide