Key points
- USD/INR at fresh two-month low
- Dollar selling, debt and equity inflows boost Rupee
- US ISM Manufacturing PMI data in focus
India’s Rupee advanced to highs unseen since early May against the US Dollar on Monday, supported by inflows and dollar selling by foreign banks.
According to a report by Reuters, citing an unnamed proprietary trader, there has been “massive (dollar) selling” since open and also talk of debt inflow associated with a large conglomerate.
Additionally, there have been “the usual equity inflows,” the trader said.
The Rupee also benefited from a move higher in other Asian currencies. The offshore Chinese Yuan surged to as high as 7.2524 after the Caixin manufacturing PMI data came in a notch better than expected.
Still, the USD/INR pair seemed well supported at 81.75-81.80 levels, which triggered speculation that the Reserve Bank of India might have intervened.
In terms of macro data, today’s focus will be on the US ISM Manufacturing PMI report for June due out at 14:00 GMT.
As of 7:16 GMT on Monday USD/INR was edging down 0.20% to trade at 81.8630. During the late phase of the Asian trading session, the exotic Forex pair went down as low as 81.7575. The latter has been the pair’s weakest level since May 9th (81.7500).
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