- Indian Rupee (INR) traces domestic equity market higher
- Sensex & Nifty 50 roar high on upbeat earnings
- US Dollar (USD) rises after strong consumer confidence data
- Fed interest rate decision in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is trading lower for a fifth straight session on Wednesday. The pair settled -0.2% lower on Tuesday at 74.59. At 14:15 UTC, USD/INR trades -0.25% at 74.39.
The Rupee is advancing following in the footsteps of domestic equities. The US benchmark indices, the Sensex and the Nifty 50 both closed higher on Wednesday for a third straight session. The Nifty closed up 1.5% and the Sensex up 1.6% in the best trading day in a month on the back of strong earnings reports from banks and automobiles.
The rise in demand for equities came even as covid cases surged and deaths crossed a grim 200,000 milestone. The S&P Rating Agency warned that the resurgence of covid could hurt India’s economic recovery.
The US Dollar is falling versus the Rupee but is advancing versus major peer on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.11% at the time of writing at 91.02.
The US Dollar is pushing higher for a second straight session following strong consumer confidence data and as investors look towards the Federal Reserve interest rate decision later today.
US consumer confidence hit a 14-month high as more business reopened. A increase in covid vaccines plus additional fiscal stimulus helped the US economy throw open its doors boosting both hiring and demand. Consumers are returning to the shops, eating out and traveling helping the economy to recover.
Attention is now turning to the Federal Reserve monetary policy decision. The Fed is widely expected to keep interest rates and the bond purchasing programme unchanged, even though the US shows strong signs of improving. The Fed wants to see around 75% of the US population vaccinated before they talk of tapering the bond buying programme and tightening policy, which could be June.