- Indian Rupee (INR) trades lower for a second session
- High frequency indicators suggest growth is picking up in September
- US Dollar (USD) eases versus major peers on safe haven outflows
- US stimulus optimism & vaccine news support the market mood
The US Dollar Indian Rupee (USD/INR) exchange rate is advancing on Wednesday for a second straight session. The pair settled +0.1% higher at 73.44 on Tuesday. At 09:15 UTC, USD/PKR trades +0.35% at 73.71, at the upper end of the daily traded range.
Indian’s economic recovery has broadened and strengthened over the past month, according to the rating agency ICRA. The agency reported that 9 of the 15 non-financial high frequency indicators recorded growth in the month of September. A further 5 indicators recorded a weaker contraction in September than previous months.
The agency did warn however that festive season sales could be strong, but that momentum could ease thereafter.
The update comes after the IMF forecast that the Indian economy will contract by -10.3% in 2020, followed by a bounce back of around 8.8% growth in the coming year. Meanwhile global growth is expected to contract -4.4% this year followed by 5.2% in the coming year.
The US Dollar is advancing against the Indian Rupee, although it is falling versus its major counterparts as hopes rise that Congress will be able to achieve a US relief package deal.
The Democrats and the Republicans have been deadlocked for months over a new US fiscal stimulus package to support the US economy. It appears that the two sides are moving closer towards a new covid rescue package. Optimism surrounding a deal is dragging on demand for the US Dollar
Supporting the mood in the market was news that pharmaceutical giant AstraZeneca could restart its covid-19 vaccine candidate trial in the US in the coming days. The trial was halted globally on safety concerns although it has since restarted everywhere expect the US.
The US economic calendar is quiet, leaving sentiment and politics to drive to greenback.