- Indian Rupee (INR) slips on covid concerns even as equities rise
- Oil rises ahead of OPEC
- US Dollar (USD) mildly lower but supported by Biden’s spending plan
- US jobless claims & manufacturing PMI in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday, rebounding from losses in the previous session. The pair settled -0.4% on Wednesday at 73.13. At 11:30 UTC, USD/INR trades +0.4% at 73.42.
The Indian Rupee is under pressure as the covid situation continues to deteriorate. The number of new daily covid infections has topped 70,000 on Thursday. This is the highest level in 5 months. Fears are growing that the surge could hold back the economic recovery in India.
The Rupee is falling despite domestic equities rising. The benchmark Sensex closed 1% higher boosted by metal stocks and banks. Meanwhile the blue chip Nifty 50 gained 1.2% on Thursday.
Oil prices were adding pressure to the Rupee, rising ahead of the OPEC meeting today. West Texas Intermediate trades +1.7% on the expectation that OPEC will keep output curbs in place until at least next month.
The US Dollar is advancing versus the Rupee. However, it is edging lower versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.04% at the time of writing, off its 5 month high reached overnight but still over 93.00.
The US Dollar is being underpinned by US President Biden’s announcement of a $2 trillion infrastructure spending plan. The huge injection of cash is aimed at improving roads, railways, broadband and clean energy and is expected to be offset by a rise in corporate taxes.
This package comes shortly after the $1.9 trillion covid stimulus package was approved. The outlook for the US economy is strengthening, with the rapid covid vaccine rollout ensuring that the US economy will be completely reopen soon.
Investors will now look ahead to the US jobless claims data and the ISM-manufacturing PMI ahead of tomorrow’s closely watched non-farm payroll report.