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INR bank notes

The US dollar is up against the Indian rupee on Wednesday morning with the rupee going against the grain of broader dollar weakness and falling before the release of Indian industrial and manufacturing output data.

USD/INR was higher by 5 pips (+0.08%) to 71.332 with a daily range of 71.204 to 71.338 as of 10am GMT. In a repeat of the action the prior day, initial losses reversed having touched 71.20 and went on to break yesterday’s high. The gains have cut the weekly decline to -0.25%.

USD still depending on Powell’s testimony

The focus again today will be on Fed Chair Jay Powell who continues to give testimony on Capitol Hill, this time to the US Senate. The official statement will make the same kind of major comments as the one made to Congress and is expected to be pre-released ahead of the testimony. Today questions following Powell’s remarks will come from Senators instead of members of Congress. After a disappointing performance in the New Hampshire Democratic Primary in which she came in fourth place, Senator Elizabeth Warren might use the testimony as a venue to begin her campaign’s comeback.

In other so-called ‘Fed-speak’, Patrick T Harper the President of the Philadelphia Federal Reserve will discuss the Economic Outlook in a speech in Pennsylvania prior to the testimony of Fed Chair Powell.

INR slowed down by pickup in oil prices

Some of the rupee weakness can be attributed to a pickup in oil prices, which tends to devalue the rupee because of India’s big oil imports as a country. Oil is finding a short-term base on optimism the coronavirus spread is slowing, which will curtail the hit to fuel demand in China. Although a mounting death toll means the outbreak remains a worry. Other news that factories are returning to business, with FOXCONN apparently planning to be back to 50% capacity by the end of the month should reduce the length of oil demand destruction in China and nearby countries.

Later today, India is expected to report unchanged industrial output growth in December of 1.8% year-over-year and a larger trade deficit in January of $11.58B, up from $11.25B in December


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