- Indian Rupee (INR) under pressure after violent faceoff between Indian & Chinese troops
- Clash overshadowed a broad risk on mood in the market after additional stimulus from the Fed
- US Dollar (USD) investors look towards US retail sales, which are expected to show record jump of 8% in May
- At 10:15 UTC, US Dollar Indian Rupee (USD/INR) trades +0.15% at 76.06
After gaining versus the weaker US Dollar in the previous session, the Indian Rupee is paring those gains in trading on Tuesday.
At 10:15 UTC, USD/INR is trading +0.15% at 76.06. This is towards the upper end of the daily traded range of 75.77 – 76.03.
The Indian Rupee is giving back yesterday’s gains and paring initial gains on Tuesday, amid a huge rise in border tensions, with China. An Indian army officer and two soldiers were killed during a violent faceoff with Chinese troops on the boarder. These are the first casualties in decades to result from a clash between the two countries in the sensitive Galwan Valley in eastern Ladakh.
The Indian Rupee had started the day on a stronger note amid risk on trading in the broader financial markets. The improved mood came following an announcement by the Fed in its efforts to support markets battered by the coronavirus crisis. The Fed said that it would start buying corporate bonds from today, as part of the previously announced programme to keep lending markets running smoothly.
Overnight the White House also indicated that it was weighing up an additional stimulus package, which would include $1 trillion infrastructure spend. This would go towards the more traditional infrastructure projects such as building roads and bridges, in addition to 5G and local broadband networks.
Investors will now turn their attention towards US retail sales for May which could provide clues as to how the recovery is progressing in the US economy. This was the month that the US started to ease lockdown restrictions and 2.5 million Americans returned to work.
Retail sales in May are expected to surge by a record 8% in May, after declining by a record -16.4% in April. A stronger reading could boost sentiment and pull the US Dollar lower, on the other hand, a weaker than forecast reading could suggest that consumers are not feeling confident enough to spend, unnerving investors