- Indian Rupee (INR) edges higher but set for weekly losses
- Geopolitical picture with China improves
- Fuel demand in India picks up
- US Dollar (USD) moves lower as covid cases surge
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower on Friday after 5 straight sessions of gains. The pair settled on Thursday at +0.3% at 74.68, close to the high of the day. At 12:15 UTC, USD/INR trades -0.07% at 74.62. The pair is on track to book gains of 0.9% across the week, after shedding 0.8% in the previous week.
The Rupee is edging higher amid reports that India and China are seeking to end the ongoing and dangerous military standoff at the ill-defined border region in the western Himalayas.
According to Indian officials, China is planning to create no patrol zone and pull back tanks and artillery.
Tensions have been elevated between to two sides for 5 months, since an altercation in June when 20 Indian soldiers were killed. The improved geopolitical picture is helping underpin the Rupee.
Signs of the Indian economy picking up are coming through. India’s fuel demand posted its first yearly increase since February. Total demand for petroleum products rose 2.5% in October reaching 17.77 million tonnes compared to 17.34 million a year ago.
The US Dollar is slipping lower versus its major peers. The US Dollar Index measures the greenback against 6 major peers and is trading -0.2% adding to losses from the previous session.
Covid remains a key focus. In the US coronavirus cases have surged. Yesterday America recorded a record 150,000 new daily infections. Hospitalisations were at 67,000. Fears are growing that more areas of the US will see tighter lockdown restrictions imposed in an attempt to control the spread of the virus.
More economically damaging lockdown restrictions would come as negotiations in Congress over an additional covid rescue package stall.
Looking ahead investors will turn to US consumer confidence data due later today.
