Indian Rupee Weakens Amid Weaker GST – A Quick USD/INR Outlook!
Arslan Butt • 3 min read
The USD/INR closed at $74.790, after placing a high of $74.815, and a low of $74.567. The USD/INR currency pair extended its gains for the second consecutive session on Wednesday, amid the strength in the US dollar. The risk-off market sentiment and the weakness of the Indian rupee (INR), combined with the strength of the US dollar, pushed the USD/INR higher on board. The Goods & Services Tax (GST) data from India declined for the second straight month in June, falling below the one-trillion-rupee level for the first time in nine months, which weighed on the Indian Rupee and supported the prices of the USD/INR on Wednesday.
On Wednesday, the Gross GST collection for June stood at 928.49 billion INR, which is a reduction of approximately $12.45 billion compared to May’s 1.03 trillion INR. Despite the declining GST collection data, the Indian Foreign Minister, Subrahmanyam Jaishankar, said that India would witness a strong economic recovery while coming out of the second wave of the coronavirus. On Tuesday, the daily caseload of coronavirus infections in India plunged to the lowest level in four months. However health experts warn that the third wave of coronavirus infections could hit India in August.
These comments kept the US dollar supported on the day, but the US treasury yields suffered, falling to their lowest level in four months, below 1.30%. However, the greenback remained green for the day and kept the USD/INR pair higher.
USD/INR – Daily Technical Levels
Pivot Point: 74.724