Commerzbank’s analysts report that India’s January trade deficit widened sharply to USD 34.7 billion, driven by a 349% surge in Gold imports as global prices rallied. Analysts expect the USD/INR pair to trade between 90.00 and 91.00 near term as portfolio outflows slow following the US-India trade deal.

Trade deficit widens but Rupee steady

"January trade deficit widened more than expected to USD34.7bn (Bloomberg consensus: USD25.4bn) vs USD25.0bn in December."

"The trade deficit could narrow in the coming months on the recently announced US-India trade deal and the pullback in gold prices."

"The pair could be range bound between 90.00-91.00 near term as portfolio outflows slow due to improving market sentiment following the trade deal with the US."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)