indian-rupee-bank-notes - INR
  • Indian Rupee (INR) extends gains
  • Domestic equities rise
  • US Dollar (USD) declines after weaker than expected jobless claims data
  • Fed to remain supportive

The US Dollar Indian Rupee (USD/INR) exchange rate is trending lower Thursday for a third straight day. The pair settled -0.1% lower on Tuesday at 72.79 a level last seen on 2nd March 2020. At 14:15 UTC, USD/INR trades -0.1% at 72.72 a fresh 11 month low.

The Indian Rupee is benefitting from the upbeat mood in the broader financial markets, which supports risker assets such as equities and currencies like the Indian Rupee.

Domestic equities ended the session higher. The Sensex settled +0.4% at 51,531. The Nifty 50 closed +0.44% at 15,173. Foreign institutional investors (FII) were buyers in the capital markets.

Relations between India and China showed signs of improving after both sides agreed to pull back troops from a bitterly contested lake area in the Himalayas. The move comes in a break through after months of standoff.

The US Dollar is falling lower across the board following a dovish Powell and weaker than forecast US jobless claims. The US Dollar Index, which measures the greenback versus its major peers continues to trade around 2 week lows.

Yesterday, Federal Reserve Chair Jerome Powell reiterated that the US central bank’s monetary policy will remain supportive. Speaking online to the Economic Club of New York yesterday, Fed Chair Powell said that the US jobs market was still a long way for being fully recovered. He added that the Federal Reserve isn’t considering raising interest rates from their current levels of near zero.

US jobless claims came in worse than expected with 793,000 Americans filing for unemployment benefits for the first time, above the 757,000 expected. Furthermore the slight decrease from the previous week disappeared with an upward revision.