Gains in the exchange rate follow two days of losses, with the Indian rupee pulling off record lows near the 77 level. The exchange rate looks set to end the week lower, having flip flopped between gains and losses for the past three weeks.
Disappointment over leaked details of a failed trial of drug to treat the coronavirus led to losses across Asian and European stock markets as well as emerging market currencies like the Indian rupee.
USD to Indian Rupee was higher by 37 pips (+0.50%) to 76.26 as of 3pm GMT.
USD/INR recovered about half of the prior two day’s losses but remained below all-time highs near 77 that were reached on Wednesday. The exchange rate has seen a weekly loss of -0.35%.
USD/INR: Indian rupee falls after Remdesivir trial flop
While there is the possibility of some short term respite, the gloomy outlook for the global economy means the risks are skewed towards more weakness in the rupee. As the currency of an emerging economy that was already witnessing a sharp growth slowdown, the rupee is relatively more exposed to the pandemic than the US dollar.
The JP Morgan Emerging Market Currency Index has fallen every day this week.
Disappointment over the leaked Chinese trial data of drug Remdesivir saw the rupee turn lower alongside regional stock markets. The maker of Remdesivir, Gilead Sciences commented on the trial data saying it was too soon to draw any conclusions and that more tests will be done. Nonetheless it looks like it’s not the wonder drug everyone was hoping it might be.
US dollar on course for weekly decline vs Rupee
The dollar is on course to close the week slightly higher versus a basked of G10 currencies, but the sharp losses over the past two days mean it will close down against the Indian rupee.
The dollar has been nudging higher this week in the face of continually awful economic data from the United States. On Friday data showed durable goods orders collapsed -14.4% from a prior ready of +1.2%.