- Indian Rupee (INR) slips despite domestic equities rising
- Oil prices side extending last week’s losses
- US Dollar (USD) supported in cautious trade
- Fed Powell & Treasury Secretary Yell due to testify before Congress
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Tuesday paring some of the losses from the start of the week. The pair shed -0.44% as the week kicked off settling on Monday at 72.37. At 15:22 UTC, USD/INR trades +0.2% at 72.52.
The Rupee is under pressure despite a slight move higher in domestic equities and a sharp drop in crude oil prices. The blue-chip Nifty 50 closed 0.5% higher, whilst the benchmark Sensex rose 0.6% boosted by financials.
US crude oil is plunging lower. West Texas Intermediate trades -4.7% at $58.65 amid growing concerns over future demand. Rising covid cases and tighter lockdown restrictions in Europe are unnerving investors. Today’s move lower comes on the back of a 6.7% decline in oil prices last week meaning that WT crude oil has lost around 10% over the past 10 days.
The US Dollar is trading higher across the board. The US Dollar Index which measures the greenback versus a basket of 6 majors, trades +0.5% at 92.23 at the time of writing.
The US Dollar is rising as investors seek out its safe haven status and look cautiously ahead to Federal Reserve Jerome Powell and US Treasury Secretary Janet Yellen’s testimony before Congress.
In the first joint testimony for the pair at Capitol Hill they will testify on the government’s pandemic relief efforts.
Federal Reserve Chair Powell is expected to stick to the same verse which we have heard from him several times in the past few weeks. Fed Chair Powell is expected to re-affirm that the US economic recovery is still far from over and still needs support, despite a recent improvement in data.
The pair are likely to be questioned heavily on inflation expectations in light of President Biden’s $1.9 trillion stimulus package being agreed and the recent turmoil in the bond market.