• Indian Rupee (INR) is higher on Monday thanks to US Dollar (USD) weakness and falling crude oil prices
  • Indian Rupee rises despite Indian equities falling.
  • US Dollar (USD) slips as investors focus on coronavirus pandemic developments and the impact on economic recovery
  • At 10:30 UTC, US Dollar Indian Rupee (USD/INR) exchange rate trades -0.14% at 75.51

The Rupee is in favour at the start of the week, building on gains of 0.8% from the previous week. As the month of June draws to a close, the Rupee has pushed 0.2% higher.

A weaker US Dollar and softer oil prices are keeping the Rupee buoyant. As global coronavirus numbers reach 10 million and the death toll hits 500,000 some lock down orders have been re-instated, leading investors to question future fuel demand, dragging the price of oil southwards. Lower oil prices are beneficial for India, a buyer of the commodity.

The Rupee has managed to rise even as Indian equity markets ended 0.5% lower, dragged down by financials and metal stocks.

Sentiment is see-sawing as investors remain unnerved by the growing number of coronavirus cases, particularly in the South of the country. The Governor of California has ordered the rolling back some reopening measures in order to bring spiralling coronavirus numbers back under control. With several states seeing coronavirus numbers growing, Investors are worried that the economic recovery could be hit.

On the other hand, Chinese industries returned to profit for the first time in 6 months in May. Profits increased 6% year on year in the biggest jump in profits since March 2018, after falling -4.3% in April. The data points to China’s economic recovery gaining traction which is helping lift sentiment.

Investors will now look ahead to pending home sales for May, due to be released later today. This week also sees high impacting releases in the form of US ISM manufacturing and non-manufacturing data, in addition to non-farm payrolls on Thursday. Tomorrow a speech by Federal Reserve Chair Jerome Powell will also be closely watched.

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