- Indian Rupee (INR) slips despite reserves rising
- Oil rises 4% at the end of a volatile week
- US Dollar (USD) rises versus majors on economic recovery optimism
- President Biden pledges to accelerate the vaccine programme
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower on Friday snapping a three day winning run. The pair advanced +0.1% in the previous session settling at 72.66. At 16:00 UTC, USD/INR trades -0.01% at 72.66. The pair looks set to rise 0.35% across the week, after three straight weeks of declines. On a monthly basis USD/INR is set to decline -1.7%
The Indian Rupee has been one of the best performing Asian currencies so far this year, thanks to a particularly strong performance this month. A steady inflow of US Dollars into the local equity market has been one of the key supporting factors.
Expectations of a solid economic recovery in the Indian economy has added to the upbeat mood surrounding the domestic equity market and the Rupee. Furthermore, the relatively higher interest rate differential between India and US is also attracting inflows.
On the data front, the Reserve Bank of India reported an increase in foreign exchange reserves of $233 million to $582.271 billion in the week ending 19th March.
Oil prices are unsupportive of the Rupee today, rising again after a highly volatile week. West Texas Intermediate trades +4% high, comfortably back over $60.00 as the Suez Canal, a key oil shipping route, remains closed.
The US Dollar is trading lower versus the Rupee but higher versus its major peers. The US Dollar Index which measures the greenback versus a basket of 6 majors, trades +0.2% at 92.69 as it consolidates around multi-month highs.
Fed speakers and US data point to the outlook for the US economy improving, underpinning the greenback. President Biden has also pledged to accelerate the US vaccine rollout further boosting expectations of a strong US recovery.