- Indian Rupee (INR) moves cautiously higher after risk aversion dominated for most of the week
- Indian housing market to suffer as rising unemployment hits demand
- US Dollar (USD) not expected to react to Jerome Powell’s third appearance this week
- US Dollar Indian Rupee exchange rate (USD/INR) set to gain for 2nd straight week
An improving mood in the broader market is helping the Indian Rupee recover from 3 straight days of losses. The Indian Rupee settled on Thursday -0.1% finding support above 76.00
At 10:15 UTC, USD/INR trades -.0.2% at 76.17, towards the lower end of the daily traded range. However, the pair is still on track for gains in the region of 0.2% across the week. This will market the second consecutive week of losses for the Rupee against the US Dollar.
Factors such as the rising number of coronavirus cases in Beijing and in some US states saw risk aversion dominate for most of this week. Elevated tensions between China and India following the first fatality in four decades along a contested border between the two neighbours also added to the risk off story.
However, fears were easing as the European session developed on Friday, with investors once again seeking riskier assets and currencies, such as the Indian Rupee. The Indian Sensex also closed 1.5% higher on Friday.
The risk on mood, overshadowed less encouraging domestic data. According to economists polled by Reuters, Indian house prices will fall for the first time in at least a decade as the coronavirus pandemic results in huge levels of unemployment will hammer demand.
Last year Indian house prices rise 3%, lagging behind a 3.7% increase in consumer prices. Looking ahead the group of 13 analysts polled by Reuters expect house prices to slump by 5% in 2020 and a further 3% in 2021.
With little on the US economic calendar, sentiment is expected to continue driving the greenback. Federal Reserve Chair Jerome Powell is scheduled to give another speech today. It comes after two appearances before congress earlier this week and following the Federal Reserve monetary policy announcement last week. Jerome Powell is not expected to add anything new to his recent cautious commentary.