USD/INR forecasts change all the time, affected by news events and relative sentiment towards the US and Indian economies and this exchange rate is even more volatile than usual because of the uncertainties around the Coranavirus pandemic.
04 Oct 2021
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The Indian rupee has dropped to its lowest level against a range of currencies since April as the Reserve Bank of India kept its monetary policy unchanged.
Most Asian currencies have weakened against the dollar on fears that surging energy prices could spur inflation and interest rate hikes.
India imports most of its oil requirements and higher crude prices tend to push up domestic inflation.INR Outlook
The USD had a strong month in September, outperforming all the G10 currencies. The gains can be attributed to more ‘hawkish’ commentary from the US Federal Reserve, especially in comparison to the European Central Bank.
According to OFX the USD trend for October is unclear.USD Outlook
Any gaining in favour for the rupee is attributed by bank commentators such as HSBC to the attraction of the carry trade — the ability to earn higher interest when holding INR versus other major currencies.
Unlike Latin American countries, which continue to benefit from a U.S. recovery, Asian countries are vulnerable to economic austerity in Saudi Arabia and elsewhere in the Middle East due to the drop in demand for Oil during the Covid pandemic. More than 60% of remittances to India, Bangladesh and Pakistan come from Gulf countries.
The foreign exchange market convention for USD/INR is to quote Indian Rupee as Rupee per US dollar. Thus a higher USD/INR rate actually means one rupee is worth less, that is you can buy more rupee for 1 USD.
You can read about other USD exchange rate forecasts here US Dollar Trends and Forecasts for 2021.
Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.