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.
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Indian rupee is up around 3% against the US dollar (in August) since its low of 77 versus the greenback in April and is gaining favour from bank commentators such as HSBC due 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.
Considering this year’s exceptional election circumstances, difficulties in rolling out fiscal stimulus, low consumer confidence and the extended equity market bull run, the US dollar is likely to continue to be vulnerable. For potential gains for the USD, keep an eye out for any news on fiscal stimulus or a correction in global equities, which could trigger a return to demand for the dollar as a safe-haven currency. September Currency Update
Migrant workers from Asia’s developing countries, such as India, have been sending home record amounts of money in recent months, defying pandemic expectations and propping up home economies at a critical time.
However, it appears workers are just sending money home in advance of their own return due to a bleak job market, particularly in the Middle East.
The Indian rupee exhibits strong seasonal patterns: the rupee typically falls in value every second-quarter (April-to-June) due to India’s heightened gold demand heading into Akshaya Tritiya – the annual spring time festival of the Hindus and Jains.
Accordingly many currency forecasts point out that rupee strength is to be expected in the second half of a typical year.
USD/INR Recent 90-Day Trend
USD/INR at 73.7 is a little below its 90-DAY average, range 73.05 - 76.4 .
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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.
This is a difficult question and the answer really depends on many factors. The best way to consider an exchange rate’s current relative value is to look at the Indian Rupee’s history against a range of currencies and in particular against the currency you are interested in exchanging it with.
For example, the following tables look at the change in the USDINR exchange rate to the present day for periods going back 10 years for popular INR exchange rates.