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INR bank notes
  • Indian Rupee (INR) traces domestic equity market higher
  • Could covid cases be falling in some areas?
  • US Dollar (USD) rises ahead of Fed rate decision tomorrow
  • US consumer confidence expected to rise

The US Dollar Indian Rupee (USD/INR) exchange rate is moving southwards for a fourth straight session on Tuesday. The pair settled -0.2% lower on Monday at 74.75. At 14:15 UTC, USD/INR trades -0.2% at 74.61.

The Indian Rupee is rising, tracing domestic equities higher, even when the covid picture in the country remains desperate.

Domestic equities rose on Tuesday ahead of a slew of earnings reports from blue chip companies. The Nifty 50 closed 0.5% higher and the Sensex closed up 0.54%. Both indices had posted three straight weeks of losses amid concerns of rising covid infections.

Cases in Mumbai are starting to dip after the lockdown was entered into earlier in the month, which is a great relief. The markets are taking their cues from there. Total new daily infections, however, remain above 300,000.

The US Dollar is falling versus the Rupee on Tuesday but is gaining versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.08% at the time of writing at 90.88. Despite the rise, it continues to trade around a two-month low.

Today’s US economic calendar is light with just US consumer confidence on investor’s radar. Consumer confidence is expected to rise in April as the US vaccination programme continues to mask progress and the jobs market improves. A strong reading could help lift the greenback.

Tomorrow’s Federal Reserve monetary policy announcement and press conference is the main risk event for the week.

The Fed are not expected to adjust policy even as the economic recovery becomes more convincing. Recent data showed that economic activity continues to rebound firmly and the labour market recovery is on track. Federal Reserve Chair Jerome Powell is likely to face intense questioning over the timing of the Fed’s next move.