- Indian Rupee (INR) set for flat end to the week
- Indian industrial production due ahead of Monday’s inflation
- US Dollar (USD) rises on safe haven flows
- Slow progress in US fiscal stimulus talks & surging jobless claims hit sentiment
The US Dollar Indian Rupee (USD/INR) exchange rate is trading flat on Friday. The pair has traded roughly flat for the past two sessions, settling at 73.75 on Thursday. At 11:15 UTC, USD/INR trades just 0.02% higher at 73.75. The pair is on track to book neither losses nor gains across the week.
Muted demand for Indian domestic equities and am rebound in demand for the US Dollar is keeping mild pressure on the Indian Rupee. Domestic equities ended on Thursday will mild losses and today was seen closing with mild gains after a recent strong rally which pushed the Sensex to an all-time high.
On the economic calendar, Indian Industrial production data is due to be released shortly. Analysts are expecting 1.1% increase in production in November compared to the previous month. October recorded 0.2% increase.
Indian inflation data on Monday will also draw into focus. Expectations are for inflation to have fallen in November compared to October but still to remain above the Reserve Bank of India’s target amid high food prices and elevated petrol prices.
Retail inflation has remained above the central banks 2% -6% comfort zone for 7 straight months.
Meanwhile the US Dollar is trending higher amid risk off trade. The US Dollar index which measure the greenback versus 6 major peers, trades +0.24% higher as investors seek out its safe haven protection.
Concerns over slow progress in US fiscal stimulus talks plus weak US jobless claims figures are hurting risk sentiment.
US applications for unemployment benefits soared last week, with initial jobless claims printing well above expectations. Claims rose 853,000 in the week ending 5th December a three month high, well ahead of the 710,000 the previous week and ahead of expectations of 725,000.
Looking ahead US consumer confidence data in addition to risk sentiment will drive the US Dollar towards the weekend.