- Indian Rupee (INR) extends losses as covid cases hits new records
- Indian GDP downgraded by Nomura
- US Dollar (USD) slips versus major peers
- US looks to jobless claims tomorrow
The US Dollar Indian Rupee (USD/INR) exchange is on the rise, extending gains for a third straight session. The pair settled +0.7% higher on Tuesday at 75.38. At 16:30 UTC, USD/INR trades +0.1% at 75.43 as it continues to hover around levels last seen in July last year.
Rupee continues to trade under pressure as the covid cases continue to surge in India and more states lockdown. The number of new daily cases hit a fresh record at 295,158 as the health system is overwhelmed.
With more states imposing lockdown restrictions in order to stem the spread of the virus. The financial markets are becoming more nervous about what the impact of this surge in cases and the subsequent restrictions will have on the Indian economic recovery.
ICRA Ratings cut the upper end of its earlier GDP forecast from 10-11% to 10 -10.5%. Nomura investment bank also cut its estimated GDP growth for 2021 to 11.5% from a previously expected 12.4%.
After a stronger start the US Dollar is falling versus its major peers on Wednesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.15% at the time of writing at 91.10 as it looks back towards the 7 week low hit in the previous session.
The mood in the market has improved as investors look beyond yesterday’s fears of rising covid cases. Risk off flows amid concerns over surging covid cases in Asia sent the US Dollar higher on Tuesday. Today the World Health Organisation reported that covid cases are on the rise in all regions except in Europe, news which investors have shrugged off.
There is little in the way of economic data today, so the US Dollar is likely to be driven by sentiment. Tomorrow sees the release of initial jobless claims. After last week’s stellar numbers investors will be keen to see whether the labour market recovery remains on track.