- Indian Rupee (INR) traces domestic equities higher
- Senex & Nifty trades +1% higher
- US Dollar (USD) declines versus majors in risk on trade
- Janet Yellen’s testimony in focus
The US Dollar India Rupee (USD/INR) exchange rate is slipping lower on Tuesday, paring gains from the previous session. The pair settled +0.1% higher on Monday at 73.18. At 12:15 UTC USD/INR trades -0.8% at 73.15.
The Rupee is advancing, tracing domestic equities higher amid an upbeat mood. Results season has started well and global cues are looking positive particularly amid expectations of a huge fiscal stimulus push in the US. Investors are optimistic as they look towards the inauguration of US President elect Joe – Biden tomorrow.
Indian shares rose over 1% on Tuesday with the Nifty closing 1.2% higher at 14,447 and the Sensex settling 1.2% higher at 49,118. Indian equities have seen a solid run across recent weeks boosted by strong foreign portfolio buyers which were net buyers again today.
Meanwhile oil traded higher, capping gains in the Rupee. West Texas Intermediate trades +1.1% at $55.37 per barrel.
The US Dollar is edging lower versus the Indian Rupee. The greenback is also moving lower versus its major peers. The US Dollar Index, which measures the greenback versus its major peers trades -0.3% at 90.48 in the European session. Attention is turning towards Capitol Hill where US Treasury Secretary Janet Yellen is due to give a testimony.
In her testimony Janet Yellen is expected to be supportive of President elect Joe-Biden’s proposed $1.9 trillion covid stimulus package. She is expected to outline the need for big fiscal stimulus action.
Questions on Janet Yellen’s views of the value of the US Dollar are expected to arise. Janet Yellen is likely to be a vocal supporter of a stronger US Dollar. However the greenback is unlikely to jump higher on such comments given the years of ultra lose monetary policy expected going forwards.