The US dollar is depreciating against the Indian local currency, the rupee this month in February 2024. The rupee is gaining strength due to a robust economy that’s inching towards the $4 trillion mark. India’s GDP currently stands at $3.732 trillion and its economy is growing by leaps and bounds. The country also beat the UK’s GDP of $3.5 trillion and now aims to topple Japan’s GDP of $4.2 trillion.
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The Indian rupee is up 0.4% vs the US Dollar year-to-date indicating that the local currency is strengthening. The US dollar remains on the back foot since the last two weeks making way for the rupee to shine. The rupee appreciated to 82.92 on Wednesday after reaching a downturn of 83.19 last month.
Leading German Bank Commerzbank Predicts US Dollar vs Rupee Performance For 2024
Germany’s leading bank Commerzbank predicts that the rupee will hold on strong against the US dollar this year in 2024. Commerzbank gave out three indicators that point towards the INR dominating the USD in the next 10 months.
- Strong Economic Fundamentals in India
- Reserve Bank of India (RBI) leaving interest rates unchanged
- Currency traders open long positions in favor of the rupee, not the US dollar
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The steady appreciation of the rupee is attracting currency investors to place long-term bets on the local currency. The move is further adding pressure on the prospects of the US dollar as trades move in favor of the rupee. Read here to know why currency traders believe the INR will outperform the USD this year.
“INR continues to be well supported by strong economic fundamentals, the pullback in Oil prices, and moderation in domestic inflation. RBI is expected to leave rates unchanged at 6.5% for the foreseeable future and to take their cue from the Fed,” wrote the bank.
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In conclusion, Commerzbank forecasted that the maximum the US dollar can rise against the rupee is 83.50 in 2024. “We project USD/INR to hold steady at around 83.50 by the end of 2024”.