- Indian Rupee (INR) strengthens for third straight day
- Indian equities trade flat, oil declines
- US Dollar (USD) slips on Yellen’s stimulus support
- US PMIs beat forecasts
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower for a third straight session on Friday. The pair gained -0.3% on Thursday, settling at 72.58. At 17:15 UTC, USD/INR trades -0.10% at 72.51.
India’s foreign exchange reserves declined by $249 million to $583,697 billion in the week ending 12th February according to Reserve Bank of India data. Reserves had reached a record high of $590,185 billion in the week ending January 29th.
According to the central bank, the decline in reserves was principally down to a fall in foreign currency assets (FCA’s) a major component of overall reserves.
Indian shares closed flat on Friday with losses in private sector lenders being offset by gains in heavyweight Reliance Industries. Both the Sensex and Nifty closed just a few points lower.
Oil prices were also on the decline as refineries in Texas started to reopen after being forced to close owing to the unexpected cold snap in Texas.
The US Dollar is under pressure across the board. It trades lower versus the Rupee and is also trending lower versus its major peers. The US Dollar Index, which measures the US Dollar against its major peers trades -0.3% at the time of writing.
Demand for the US Dollar weakened as US Treasury Secretary Janet Yellen highlighted the need for additional fiscal stimulus despite US retail sales printing significantly ahead of forecasts at the start of the week. Instead, Janet Yellen cited the downbeat jobless claims numbers which highlight the weakness in the labour market.
Yellen’s support for the Biden administration’s $1.9 trillion covid stimulus package comes as house speaker Nancy Pelosi indicated that the House of representatives could vote on the package as soon as next week.
Data in today’s US session has been more upbeat with service sector PMIs unexpectedly rising to 58.9 in February, up from 58.3. Activity in the manufacturing sector also remained firmly in expansion territory.
