Originally Posted by Ash2008
Yes I want the historical data & any trends/patterns if available on the USD INR movement. It would be of great help if you can send any information on this topic.
Also, the economic indicators have tremendous potential to move prices in the markets. And market participants will place higher regard on one stat vs. another depending on the state of the economy. The macroeconomic factors that I am looking at are Indian GDP, Inflation, Capital flows & Trade flows. Are there any other factors that play a significant role in the currency movement? And how important are the US economy stats in USD INR movement?
Unlike other currencies, not much of speculative trading takes place in the INR-USD pair.
Thus, the price of INR against USD is mostly dependant on actual demand and supply of the USD in India
and not on expectations of traders.
The two biggest factors that determine INR-USD exchange rate are the trade account surplus/deficit and capital (investments) account surplus/deficit.
This data is made available by RBI on quarterly basis.
You will get the details of "balance of payments" here
For FY 2009 Q1, India had a current account deficit of $10.7 billion and capital account surplus of $13.2 billion.
For earlier quarters, the figures ($ million) are as follows:
2007-08:Q4 A Current Account -1041
2007-08:Q4 B CAPITAL ACCOUNT 25425
2007-08:Q3 A Current Account -5117
2007-08:Q3 B CAPITAL ACCOUNT 31300
2007-08:Q2 A Current Account -4944
2007-08:Q2 B CAPITAL ACCOUNT 33960
2007-08:Q1 A Current Account -6301
2007-08:Q1 B CAPITAL ACCOUNT 17346
As you may notice, India's trade account is always in deficit. India imports more than what it exports. This creates a constant downward pressure on the INR.
The direction of the net capital flows determine if INR will get stronger or weaker.