INR had a bit of a comeback on Friday. Yeah, it got a boost from domestic stocks doing well and the US Dollar getting slightly weaker. Oil? Brent Crude trimmed some gains but it’s been up over 4% for the week. Those Middle East tensions, you know—always keeping the market edgy. So, Sensex and Nifty, they both rallied more than 1%, snapping out of a three-day slump. And the RBI? They cut the CPI forecast to 3.7% for FY26 since retail inflation hit a low of 2.82% in May. Go figure.
The Indian Rupee’s on a seesaw, snapping out of its three-day funk against the Dollar on Friday. It recovered a bit after hitting a low point the day before. The Dollar’s softer too, and Crude Oil prices took a breather. Traders are probably still trying to digest Trump’s, uh, two-week delay on deciding if the US is gonna step into the Israel-Iran fray. USD/INR dipped during US trading hours, last seen doing a sort of wobbly 86.60 thing. Yeah, the pair cooled down from a multi-month high but still up for the week, thanks to those high Crude Oil prices amidst all that geopolitical drama.
Trump’s two-week breather to decide on Iran? It’s like a temporary chill pill—calmed things a bit, but, honestly, risks are still gnawing at everyone. The air’s thick with tension—missiles are flying, the conflict’s got no clear off-ramp yet. Folks are worried if things mess up more, it could mess with energy flows and hit currencies like the Rupee, especially if Oil flips again and heads north. Yikes.
Ah, Friday vibes for the Rupee. Lifted by some strength in the domestic equity markets—like a little mood booster. The steadier Crude Oil prices didn’t hurt either. Meanwhile, a little nugget from Motilal Oswal: India’s economic indicators look like they’ve got a pep in their step—GDP growth picked up to 7.4% in Q4 FY25, and inflation? Under 4% for four months now. GST revenues are climbing steadily too. Positive much?
The core sector in India? Not so much. Growth slipped to 0.7% in May from last year’s 6.9%. Electricity, coal, crude—these guys make up like 40% of India’s industrial output. And the recent data shows heavy industry’s got some patchy momentum despite that cheerful GDP. So, there’s that.
Sensex and Nifty had quite the bounce on Friday after a losing streak. BSE Sensex leaped over 1,000 points, hitting 82,408.17, and NSE Nifty50 climbed up 319.15 points to 25,112.40. Boom, stock market.
Brent Crude? It slipped over 2% on Friday, dancing around $77 a barrel. Traders are reacting to whispers that the US might pump the brakes on military action in the ongoing Israel-Iran ordeal. Prices are still up, though, hinting at nervous energy markets that could tweak up if supply routes get messed up.
The RBI had some chats, released minutes from their early June meeting. They cut the repo rate by 50 basis points, second cut since February. Also, they’re trying to keep things stable with a 100 basis point cut in repo and CRR since February. Governor Malhotra says these measures should anchor some stability and keep growth momentum cruising amidst global shakes.
Oh, and they clipped their CPI inflation forecast to 3.7% for FY26 from 4%. Retail inflation? A nice dip to 2.82% in May from 3.2% in April. It seems food inflation’s chilling at below 1% for the first time in four years. Lower inflation’s making a strong case for more relaxed policies which is good news for the Rupee.
Eyes are still wide open though with the Iran-Israel conflict heating up. Trump’s all like “I’ll decide in two weeks,” still keeping that diplomatic card in his pocket. Netanyahu’s flexing a bit, saying Israel might do a solo gig on Iran’s nuclear sites if needed. A senior Iranian lawmaker’s throwing down too, hinting they might shut the Strait of Hormuz if the US escalates. Spicy stuff.
The US Dollar Index took a bit of a backslide on Friday, dropping below 99. Traders are probably reassessing safe-haven demand. The Philly Fed Manufacturing Index held steady at -4.0 in June, missing expectations. Looks like the manufacturing sector’s still stuck in a slump due to high borrowing costs and uncertain economic conditions. Earlier, the central bank kept interest rates unchanged, balancing pesky inflation against slowing growth signs.
Ahead, folks are waiting on Monday for some fresh PMI data from both India and the US. Meanwhile, USD/INR’s in a bit of a sticky spot technically. It broke out from a multi-month symmetrical triangle—fancy talk for a pattern that got traders buzzing earlier. Friday saw a pullback with bearish vibes.
The 21-day EMA’s around 85.86 now. RSI cooled off a bit too but still gives buyers an edge as long as USD/INR stays above that crucial support zone around 85.80-86.00. Traders, onward!
