INR forecast: INR opens with massive overnight weakness at 72.52 as against last week closing of 71.85 and may trade the day cautiously between 72.10-72.85+ under mixed manner. With a fresh round of uncertainty surrounding trade war between U.S-China, demand for INR may remain low this week.
Measures announced by Govt would not result in any immediate USD supply and market may even consider the steps as sign of weak intervention. The only good thing is that there is an increased possibility of further interventions and hence INR may see volatile swings.
Trumps stand on Chinese imports just seems to get tough as U.S state election approaches. In its latest stand, Trump plans to implement additional import tariff about 10%-25% on Chinese goods as early as today. While China has strongly condemned U.S action and have even threatened to pull out from next week trade talk.
Sensing further escalation over trade war, Investors have turned to safer investment like USD & JPY. Another concern that is distressing the market is flux in crude price. Sanction on Iranian exports by U.S seems to be creating shortage of oil. Oil importers have already started to make advance payment. If report are to be believed, U.S crude inventories have taken a hit by Trump action over Iran and is expected yo worsen in coming future.