- Indian Rupee (INR) slips slightly but remains resilient
- UD Dollar inflows surged for PoweGrid InvIT
- US Dollar (USD) falls rises versus major peers
- US factory orders, business conditions and trade data due.
The US Dollar Indian Rupee (USD/INR) exchange rate is edging higher on Tuesday, snapping an eight straight session winning run. The pair settled -0.3% lower at 73.82. At 11:30 UTC, USD/INR trades just a few pips higher at 73.85.
The Rupee showed signs of weakening after a long rally across past almost two weeks. The Rupee tracked domestic stocks lower as covid woes spooked investors.
News that the Indian Premier League (IPL) cricket league has been suspended due to the spiraling covid crisis unnerved investors. The hit to risk sentiment saw investors sellout of Indian domestic equities and the Rupee.
This is the first day of losses for the Rupee for some time after massive US Dollar inflows for an initial public offering. The PowerGrid InvIT IPO closed for subscriptions on Monday attracting over $2.78 billion.
Analysts suggest that there is a good chance that the Reserve Bank of India will come up with a solution to the problem soon.
The US Dollar is advancing across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.4% at the time of writing at 91.32 after rebounding from weakness in the previous session.
The US Dollar declined on Monday after unexpectedly weak US manufacturing PMI data. The ISM manufacturing PMI for April declined to 60.7, down 4 whole points from 64.7 the 24 year peak reached in March. Expectations had been for a rise to 65.
The reason that the PMI fell is not due to a slowdown in demand which would normally be the case. It is instead due to problems with the supply side. Managers reported troubles meeting the rising rate of demand as covid limits the availability of some parts and/or materials.
Looking ahead, there are several data points this afternoon, including Factory orders, Business conditions and trade balance which could direct movement in the US Dollar.