The rupee will fall further against the U.S. dollar over the next 12 months than previously thought, hit by slowing growth momentum and an escalating global trade war that has recently threatened to engulf India, a Reuters poll found.
Last year, a deep sell-off in emerging markets and a widening domestic fiscal deficit, exacerbated by rising oil prices, pushed the rupee down nearly 9% and that weak trend is not expected to change over the coming year.
A trade conflict between the United States and China, which shows no signs of being resolved anytime soon, will probably put further pressure on risky assets like the Indian currency.
“We expect the Indian rupee to keep depreciating through the rest of the year, given a higher risk-off sentiment around trade tensions, limited portfolio inflows, slower domestic growth and stretched valuations,” said Rini Sen, India economist at ANZ.
So how low can the USDINR go, lets go to the charts?
Monthly Chart (Curve Time Frame) – monthly supply is 73.500 and monthly demand is 63.500.
Weekly Chart (Trend Time Frame) – the trend is down.
Daily Chart (Entry Time Frame) – the chart suggests price is heading down to at least the daily demand at 66.50.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.