- Indian Rupee (INR) pauses for breath after 3 sessions of gains
- Indian benchmarks Nifty 50 & Sensex close at all time high
- US Dollar (USD) hits 2.5 year low on risk outflows
- Fed in focus, no changes expected
The US Dollar Indian Rupee (USD/INR) exchange rate is trading flat on Wednesday, pausing for breath after three straight sessions of gains. The pair settled -0.1% lower in the previous session at 73.55. At 10:15 UTC, USD/INR trades at approximately the same level.
The Rupee has been well support over the past few session amid rising risk appetite in the global financial markets. Visible progress on the covid roll out programmes in several counties and weakness in the safe haven US Dollar are boosting the Rupee.
Indian domestic equities once again close at a record high thanks to vaccine optimism and gains in financial and tech stocks. The Nifty 50 ended +0.8% higher at 13682 whilst the Sensex closed 0.9% higher at 46,666. The two indexes have hit record highs in the past 17 of 26 session.
The risk on mood is boosting demand for emerging market equities and foreign institutional investors are net buyers with sustained portfolio inflows lifting the Rupee.
Oil prices started the day weaker in Wednesday after a surprise gain in crude oil inventories. However, the price has sinc e recovered and at the time of writing West Texas Intermediate trades +0.4% $47.80 per barrel.
The US Dollar is relatively flat versus the Rupee. However, it has dropped sharply lower versus its major peers. The US Dollar Index trades -0.3% at 90.30 a fresh two and a half year low as investors.
Progress in US stimulus talks is helping to drive the US Dollar lower. Investors are increasingly confident that the Democrats and R[publicans will manage to agree at least some form of additional fiscal stimulus before the Christmas break on Friday.
Attention will now turn towards US retail sales data and the Federal Reserve monetary policy announcement due later today. The Fed are not expected to move on policy.