INR: Firmer Dollar Aids Modest Recovery in USD/INR

USD/INR trades a moderate 0.10% in the green, undoing most of the decline from earlier in the week. The pair last trades above the 83.5000 handle and back within relatively close proximity to its all-time high of 83.5750. The slightly firmer greenback through the APAC session has likely aided the move higher in USD/INR, while the broader increase in oil prices over the past week may be providing an additional headwind to the rupee.

• Nevertheless, analysts continue to flag that inflows into stocks and bonds are likely to limit rupee downside as the much-anticipated inclusion of Indian bonds into the JP Morgan EM index nears. Today, India’s major equity benchmarks have recorded modest gains, and continue to trade close to their record highs.
• Meanwhile, India’s central bank sold a net $3.6bn in spot forex in April, according to its latest bulletin. That marks its first net sales after four month of purchases in spot.
• RBI Governor Das spoke at an event earlier this morning, though offered few clues over the path of monetary policy. Looking ahead, preliminary PMI figures for June will cross tomorrow morning.