- India reimposes localised lockdowns, including in industrial areas as coronavirus tally nears 800,000
- Indian economic recovery set to be even more drawn out
- US Dollar rises on safe haven flows as new covid-19 cases hit 60,000
- US wholesale inflation on the economic calendar on a quiet end to the week.
The US Dollar Indian Rupee exchange rate is pushing higher for a fourth consecutive session. At 11:15 UTC, USD/INR trades +0.1% at 75.20. The pair is on track to gain 0.8% across the week.
The perceived riskier Indian Rupee is trading on the back foot as concerns over growing coronavirus numbers, not just in India, but the US, Australia and Hong Kong drag on sentiment as a whole.
In India coronavirus cases have grown by 26,000 over the past 24 hours, with lock downs being re-imposed in India’s most populous state and in an industrial hub with automakers, drug factories and brewers.
As India’s total coronavirus tally reaches almost 800,000 economically important parts of the country are being put back under lock down orders. Employees are not able to work and factories are having to close again. This will mean that the economic recovery for Indian will be even more drawn out.
Rising coronavirus numbers in America are also unnerving investors and driving risk aversion in trading today. The number of daily cases in the US has surged through 60,000, raising fears of a second lockdown and that the economic recovery could be undermined.
The US economy is showing signs of recovery, yesterday’s jobless claims revealed that the number of Americans signing up for unemployment benefits fell to the lowest level in 4 months at 1.3 million. The number of ongoing claims also dropped by more than analysts had forecast suggesting that Americans are being re-hired at a quicker pace. However, these figures could deteriorate again in the coming weeks if cases continue to rise.
Today the US economic calendar is quiet with just factory level inflation numbers for investors to mull over. Analysts are expecting inflation at wholesale level to increase by a rather unremarkable 0.1% in June after slipping -0.1%.