- Indian Rupee (INR) rises as China’s economic recovery gathers momentum
- Oil trades lower, -0.7%
- US Dollar (USD) eases on safe haven outflows amid encouraging vaccine news
- US Congressional fiscal stimulus agreement a step closer
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower at the start of the new week, paring some gains from the previous week. The pair gained +0.6% across the previous week, settling at 73.44. At 09:15 UTC, USD/INR trades -0.6% at 73.32.
The Indian Rupee is benefitting from a broad risk on mood in the market. Risk appetite has improved following signs that the economic recovery in China is gathering steam. China’s economy accelerated in the July – September period by 4.9%, up from 3.2% growth in the second quarter as consumption increased and factory output continued to grow. Hopes are rising that strong economic growth in the world’s second largest economy could help boost growth of its trading partners.
Also supporting the Rupee are weaker oil prices. West Texas Intermediate trades -0.7 at $40.60 as concerns over the demand outlook overshadow the strong Chinese growth data.
The US Dollar is trading lower versus its peers as investors shun the US Dollar’s safe haven properties in search of riskier assets and currencies such as the Indian Rupee.
News from drug maker Pfizer on Friday that a coronavirus vaccine may be available by the end of the year is lifting risk appetite. This is some welcomed god news after both Johnson & Johnson and Eli Lilly announced earlier last week that their covid vaccine candidate advanced stage trials had been paused for safety concerns.
Also playing into the mix are rising hopes that the US Democrats and Republicans could be moving closer to agreeing an additional stimulus package. Optimism is rising that a relief package could still be achieved before the 3rd November US elections after President Trump indicted that he is willing to support a package in the region of $2 trillion. This is still short of the Democrats $2.2 trillion proposal, but is certainly close that the Republicans initial $1.5 trillion package.