- Indian Rupee (INR) traces domestic equities higher
- Oil prices extends sell off
- US Dollar (USD) trades higher versus major peers
- US GDP Q3 expected 33% YoY
The US Dollar Indian Rupee (USD/INR) exchange rate is trading on the back foot on Tuesday, snapping a three-day winning streak. The pair settled on Monday +0.6% at 74.02. At 10:15 UTC, USD/INR trades -0.3% at 73.87.
After a sharp slide versus its US counterpart, the Indian Rupee is strengthening. The Rupee sold off as fears surrounding the new covid strain spreading across the UK hit risk sentiment. The new strain appears to be much more contagious. As a result of the hit to risk sentiment, Indian equities experienced a steep sell off whilst the safe haven US Dollar rose.
The Sensex recorded a 3% loss on Monday, whilst the Nifty 50 crashed 3.1%. However, the Indian equity benchmarks are on the rise once again on Tuesday, underpinning the Indian currency.
Crashing US crude oil prices are offering some support to the Rupee. Oil slumped 1.7% in the previous session and is extending those losses by a further 1.8% on Tuesday as investors fear that the new more infectious covid strain could result in tighter lockdown restrictions in the coming weeks and months.
The US Dollar was trading lower versus the Indian Rupee. However, the greenback was pushing higher versus its major peers. The US Dollar index which measures the greenback versus its major peers, trades +0.25%.
The US Dollar had surged higher in the previous session, although it rebounded off session highs to close lower after the US Congress agreed a huge spending bill for the US. The bill includes a $900 billion covid rescue package and a $1.4 trillion government funding package.
Looking ahead, investors will focus on US GDP data for the third quarter. Economists are expecting growth of 33% on an annualized basis.