- Indian Rupee (INR) traces equities lower
- Sensex closes down almost 2%
- US Dollar (USD) supported in cautious trade
- Fed Powell & Treasury Secretary Yellen due to testify before Congress again
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Wednesday for a second session. The pair rallied +0.25% in the previous session settling at 72.55. At 14:00 UTC, USD/INR trades +0.1% at 72.64.
The Rupee is tracing domestic equities lower. Indian shares closed almost 2% lower, dragged down by financials and weakness in global markets. Concerns are rising over the economic impact from a resurgence of covid.
A spike in cases in India, has also led to the emergence of a double mutant variant which has added to concerns that the government is struggling to keep a handle on the outbreak.
The US Dollar is trading higher across the board. The US Dollar Index which measures the greenback versus a basket of 6 majors, trades +0.2% at 92.54 at the time of writing towards the high of the day.
The US Dollar pushing higher on safe haven flows. Rising covid cases in Europe are unnerving investors and the potential of tax hikes in the US added to the risk off mood.
Europe is experiencing a steep rise in covid cases. The largest economies within the region, Germany, France and Italy have tightened lockdown restrictions once again in order to bring covid cases under control. Investors fear the impact that a longer lockdown will have on the economic recovery. As a result, investors are selling out of European assets and are looking to the US Dollar for its safe haven properties.
The US Dollar has shrugged off weaker than expected durable goods data. US durable goods orders decrease for the first time since April, pointing to a pause in the almost year long manufacturing rebound. Durable goods orders -1.1% after an upwardly revised gain of 3.5% in January.
Attention will now turn to Federal Reserve Chair Jerome Powell and US treasury secretary Janet Yellen who will testify again before Congress.