- Indian Rupee (INR) extends gains
- India trade deficit widens
- US Dollar (USD) declines on easing treasury yields
- US looks to ADP data
The US Dollar Indian Rupee (USD/INR) exchange rate is moving lower on Tuesday for a second straight session. The pair settled on Monday at 72.39. At 17:15 UTC, USD/INR trades -0.14% at 72.29 towards the low of the day.
Demand for the Indian assets have been on the rise as the covid vaccine programme in the country picks up. Indian equities finished higher again today and the Rupee extends gains.
Boosting sentiment was news that Prime Minister Narenda Modi was administered the first does of a home grown covid vaccine, setting the scene and kicking off the country’s wider vaccination drive.
Domestic equities powered higher with the Nifty 50 and the Sensex both closing 1.5% higher in the previous session.
Data wise, India’s trade deficit in goods widened to $12.88 billion in February up from $10.16 billion in the same period a year earlier. The government data revealed that merchandise exports fell 0.25% last month year on year. However imports were up 6.98% to $40.55 billion.
Oil prices are on the decline also supporting the Rupee. West Texas Intermediate trades -1% below $60 ahead of the OPEC meeting on Thursday. Given the recent rally in the price of oil expectations are growing the OPEC+ group with ease output cuts.
The US Dollar traded lower across the board. The US Dollar Index which measures the greenback versus its major peers trades -0.2% at 90.80 at the time of writing.
Easing treasury yields are pulling the US Dollar lower as investors await fresh catalyst.
There is no high impacting US Dollar due to be released today. Instead, investors will look ahead to tomorrow’s ADP private payroll numbers. These figures are a key lead indicator for the non-far, payroll numbers at the end of the week. Analysts are expecting the ADP payroll to increase by 168,000, just marginally short of January’s 174,000.