The US dollar is flat against the Indian rupee on Wednesday because currency markets are closed for the Gudi Padwa, the spring festival that marks the traditional New Year for Marathi and Konkani Hindus.
The passing of a big US fiscal stimulus package had been priced into markets over the past several days with a modest move away from havens like the dollar and a little more interest in risky currencies.
The lockdown of 1.3 billion people in India to combat the coronavirus has meant the rupee has not been benefitted from the more positive mood across markets and hit fresh record lows again this week.
USD/INR was last quoted at 76.37 as of 12pm GMT.
Moves in the currency pair had been more modest on Tuesday but the currency pair still hit record highs above 76, totalling +1.3% for the week to date.
Indian Rupee near record lows on Gudi Padwa
The Indian cultural holiday has given the nation’s currency a break from a relentless move lower in the past couple of weeks. Investors had been pulling funds out of India in anticipation of a global economic contraction and a sharp slowdown in India’s domestic performance.
Starting Wednesday, Indian Prime Minister announced the country with a population of 1.3 billion people will enter a full lockdown. He said: “To save India, and every Indian, there will be a total ban on venturing out of homes.”
US dollar boosted by new spending plan
Early Wednesday morning it was reported that after days of negotiations the United States Congress and White House had agreed a massive new $2 trillion spending plan. The plan is multi-faceted but includes enhanced unemployment insurance and a cheque being paid to every American.
In announcing the deal, Democratic Senate Minority Leader Chuck Schumer said “We have a bipartisan agreement on the largest rescue package in American history. This is not a moment of celebration but one of necessity.” The deal also seems to have the seal of approval from Donald Trump with Treasury Secretary Steve Mnuchin telling journalists that the President would “absolutely” sign it if Congress passes it.