• Indian Rupee (INR) extends losses on rising covid cases & dovish RBI
  • Daily covid cases top 131,000
  • US Dollar (USD) rises across the board
  • US PPI inflation jumps

The US Dollar Indian Rupee (USD/INR) exchange rate is advancing for a fourth straight session on Friday. The pair settled +0.3% on Thursday at 74.57. At 15:30 UTC, USD/INR trades +0.25% at 74.74 a fresh 4 month high.

The Rupee remains depressed after a surprise move by the Reserve Bank of India earlier in the week to ease monetary policy and as parts of the country lockdown amid a surge in covid cases.

Covid cases have reached yet another record high with 131,969 cases reported on Friday, this takes the total to 13.06 million, as it creeps closer to Brazil’s 13.28 million cases.

India’s foreign exchange reserves declined by $2.415 billion to stand at $5.76.869 billion in the week ending April 2, according to the Reserve Bank of India. The decline in reserves was owing to a a fall in foreign currency assets, a major component of the reserves.

The US Dollar is advancing across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.15% at the time of writing at 92.20. The US Dollar continues to hover around a two week low and is set for its biggest weekly decline since mid-December.

The US Dollar is pushing higher following a solid inflation data. The Producer Price Index (PPI) which measures inflation at wholesale level surged 1% in March compared to the previous. This was up from 0.5% recorded in February and well ahead of the 0.5% that analysts had forecast.

Annually, PPI inflation rose by 4.2% in March marking a significant jump up from 2.8% in February. Analysts had penciled in 3.5% growth.

The data, which showed that inflation rose at the quickest rate in just under a decade, supports expectations of higher inflation as the US economy reopens.