India is a huge country with 1.4 billion population as of 2022 Dec. 12. Because of this, its currency could be attractive for Indian and international traders as it holds huge potential for profits. In this article, we will try to analyze India’s currency trends, and current prices and provide objective information for its 2023 possible trends.
Trends And Factors That Affected INR Price
India’s currency, the Indian Rupee (INR) is affected by many factors, including but not limited to oil prices, trading inflows, and investment flows. It had its recent dip at 82.5 in November 2022. Its spread fluctuates between 1-10 pips. As the US Fed is fighting inflation fiercely with interest rate hikes, all currencies globally are suffering weakening against the dollar and Indian Rupee is no exception.
Since the Fed is about to continue raising interest rates it is logical to think that INR at least will maintain this 82.5 price range and depending on fundamentals it could weaken even further to the 90s range. Let's discuss all factors affecting INR price and what its price could be in 2023 and beyond. The Indian Rupee has been in a downtrend since 2010-2012 and it seems this will continue as the Fed doesn’t seem to stop battling inflation. This could be a strong indicator of INR price going further down against USD in 2023 as well.
Another influential factor can be financial markets. Since the difference in spread, many traders could be attracted to INR. For relatively new traders the terms spread, bid, and ask prices may seem confusing or hard to grasp, you can check bid and ask prices explained here and get to know how to read the currency quotes properly. It plays a huge role in determining the demand for INR in different financial markets, especially when it comes to the foreign currency exchange market. For new traders, it is important to use trusted websites and information sources like this article and the links provided to have a clear understanding of current market conditions and what to expect in the near and long term.
What Can Be Main Trends For INR Price In 2023
India has a trading deficit of about $100 billion dollars, an uptrend in the INR/USD chart seems unlikely in 2023. At least in early 2023, it is highly improbable. Could India’s central bank affect this negative trend somehow? It is theoretically possible but I would not bet on that at this point in time. Even if they tried to raise interest rates and use other means to affect INR strength, the US Fed seems more determined on the dollar’s strength and definitely holds more power and tools than India.
But this negative prediction does not mean traders can not profit from this information. Traders can make money no matter how currency behaves because they can use a powerful tool called short selling. Short selling enables traders to straight out sell INR/USD without buying it first. So paired with the prediction that 2023 could be a continuation of the INR/USD downtrend, traders could utilize this as an indicator to only take selling opportunities with the INR/USD pair. Currently, INR/USD sits at 82.5 ($0.012) price mark. With the spread being only 1 pip, it seems cheap and attractive for experienced traders.
Now, let’s not take this article as a call to action. We are only speculating here based on the current world fundamentals. This data could change at any moment and past success is no guarantee for future price action or behavior. In a relatively long-term AI algorithmic service provider AI PICKUP predicts the rupee will continue to fall for 2025 at least from the current price of 82.5 to 90 to 92. This further confirms our analysis.
To sum it all up, the Indian Rupee is not likely to go bullish anytime soon. In early 2023 it is more unlikely that it will strengthen vs the US dollar, in a long-term downtrend continuation is probable. For 2023 INR price will most likely be in a downtrend for at least 4 months from January 2023 to April 2023. The moment you hear that the FED has stopped increasing interest rates or started to lower them, it will be a huge sign that a possible reversal is coming.
All current fundamentals and technicals predict INR recovery is unlikely for the time being. What are other tools to predict INR prices? Technical analysis will provide a good signal for possible entries while fundamentals predict main trends. The 100-day moving average confirms the above analysis and will give good support and resistance levels for trading the pair.