- Indian Rupee (INR) pares gains from last week
- Sensex & Nifty 50 hit fresh all time high
- US Dollar (USD) rises on strong economic recovery expectations
- US non farm payroll disappointed last week
The US Dollar Indian Rupee (USD/INR) exchange rate is advancing at the start of the week, paring losses from the previous week. The pair settled -0.1% lower across last week at 72.81. At 11:15 UTC, USD/INR trades +0.2% at 72.96.
Analysts are expecting the Indian Rupee to be well supported this week after the Reserve Bank of India kept interest rates unchanged on Friday but maintained an accommodative stance and amid improving risk sentiment in the broader financial markets.
Domestic equities rose for the sixth straight session on Monday closing at a record high thanks to continued optimism from last week’s Federal budget and strong corporate earnings.
The Nifty 50 ended 1.2% higher whilst the Sensex closed up 1.22%. A recent flood of foreign portfolio investors (FPI) has benefitted the market with $1.5 billion invested by FPI’s during the first week of February alone.
Adding to the upbeat mood, the covid vaccination drive is also underway in India.
Meanwhile the US Dollar is advancing across the board on Monday. The US Dollar Index, which gauges the greenback versus 6 major peers trades +0.15% at the time of writing.
The US Dollar is advancing on optimism surrounding the Biden administration’s $1.9 trillion covid stimulus package which took another step towards being implemented. Investors expect the massive stimulus package to drive a faster economic recovery. US treasury yields are on the rise, boosting the US Dollar.
The greenback is rebounding after selling off on Friday following disappointing US non farm payroll figures. 49,000 jobs were created in the US in January, whilst December’s figures were also revised sharply lower. The data highlighted the need for additional US stimulus.
There is no high impacting US economic data due today. The US economic calendar is relatively quiet across the week with US inflation on Wednesday the key focus.