- Indian Rupee (INR) shows resilience in risk off trading, as Indian equity market falls
- Coronavirus cases in India surge to almost 1.2 million
- US Dollar trades broadly higher on safe haven flows as US orders China to shut down its consulate in Houston
- US homes sales are expected to surge thanks to low mortgages and despite 11.1% unemployment
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Wednesday after falling steadily across the first half of the week. The pair settled on Tuesday -0.3% at 74.54. At 10:15 UTC, USD/INR trades at 74.55.
The Indian Rupee pared initial gains amid a muted equities market and strengthening US Dollar. Indian equities are heading lower following a broad global trend in risk off trading. Both the Sensex and the Nifty are on lower ground with corporate earnings failing to impress.
Coronavirus cases surging have added to the risk off tone. Indian covid cases jumped to almost 1.2 million on Wednesday morning, alarming investors as the outbreak hits production in several sectors and squeezes demand.
Analysts noted that the Indian Rupee has been unable to break through strong support at 74.50, most likely owing to the Reserve Bank of India buying.
The US Dollar is trading broadly higher versus its peers as risk off dominates in the financial markets. Optimism is fading of further US fiscal stimulus being agreed by the Republicans and Democrats this week. Concerns over rising US coronavirus cases are also on the up as the US passes the grim 4 million milestone for total infections.
US – Chinese tensions are weighing down the mood in the market after the US tells the Chinese consulate in Houston to shut down in three days in an unprecedented move. The US has cited the need to protect US intellectual property and information as the reason for the move, amid a sharp deterioration in relations between the two powers.
Looking ahead investors will focus on US existing home sales data. Analyst are expecting home sales to rebound in June after plunging in May. Expectations are for 24.5% jump in home sales, boosted by low mortgage rates and despite 11.1% unemployment.