- Indian Rupee (INR) trades lower as India records over 90,000 new daily covid cases
- Indian government continues to reopen economy regardless, underground trains restart today.
- US Dollar holds gains following Friday’s surprise fall in unemployment
- USD finds support from rising US – Sino tensions
After gaining 0.24% across the previous week, the US Dollar Indian Rupee (INR/USD) exchange rate is extending those losses on Monday. At 11:30 UTC, USD/INR trades +0.2% at 73.44.
The Indian Rupee is trading on the back foot as the number of coronavirus cases in the country soars. India has now overtaken Brazil as the second most infected country in the world, only after the US. India recorded just over 90,000 new cases in the past 24 hours. The total number of infected has now reached 4.2 million, whilst the US has recorded 6.2 million cases.
Even as the number of cases are soaring, the Government continues to reopen the economy amid concerns over the economic damage that the long lockdown has caused. India’s GDP contracted -24% in the June quarter and million of jobs have been lost. Today the underground train service in the city was being reopened after remaining shut for months.
With public transport roaring back to life, rates of infection are expected to continue climbing sharply higher, with no sign of the peak in sight.
The US Dollar continues advance after Friday’s data from the US Labour Department showed that level of unemployment in the US, declined by more than forecast last month. The unemployment rate dropped to 8.4% in August. This was down from 10.2% in July and surprisingly better than the 9.8% analysts had pencilled in. The encouraging print quelled concerns that the recovery in the US labour market was slowing following a resurgence of coronavirus cases over the summer months.
US – Chinese tensions are also n the rise after the Trump administration blacklisted SMIC Chinese tech firm, boosting demand for the safe haven US Dollar.
US economic data has been broadly supportive of the greenback, particularly last week. However, US Congress have still failed to reach an agreement over an additional rescue package to support the economy is caping any gains in the greenback.
Today the US is closed for a public holiday, volumes will be light and there is no US data due to be released.