USD/INR: Rupee rises to fresh 7-month tops near 68.40

• Surge in foreign inflows into equities, seasonal factors and broad USD weakness underpin.
• USD/INR breached the key 68.50 psychological support, what’s next?

The Indian National Rupee (INR) extends its run of gains against the US dollar for the tenth straight session this Monday, dragging the USD/INR cross to fresh seven-month lows of 68.44. At the press time, the cross trades near 68.55, having faded the recent spike to 68.88.

The Indian currency continues to benefit from the ongoing rise in the foreign investment flows into the Indian stock markets, as markets remain expectant of Prime Minister (PM) Narendra Modi returning to power for the second term.

Further, broad-based US dollar amid increased odds of the Fed maintaining its accommodative stance on the monetary policy this week, following the recent series of downbeat US fundamentals, also collaborated to the downside bias in the USD/INR pair. The USD index trades near three-day lows of 96.40, down -0.11% so far.

The seasonal “March factor also continues to remain one of the key factors behind the Rupee upsurge. According to Reuters, “… most exporters bring back their dollars to India towards the end of the fiscal year to settle their annual accounts and repayment of debts which increases inflows.”

USD/INR Technical Levels