inr-bank-notes - INR
  • Indian Rupee (INR) moves lower despite rising foreign exchange reserves
  • Indian covid cases top 24 million
  • US Dollar (USD) falls of reassuring Federal Reserve
  • US retail sales and consumer confidence in focus

The US Dollar Indian Rupee (USD/INR) exchange rate is heading southwards on Friday, extending losses for a second consecutive day. The pair settled -0.08% lower on Thursday at 73.47 towards the low of the day. At 11:30 UTC, USD/INR trades -0.24% higher at 73.29. The pair is set for a minor weekly gain of 0.05%.

The Indian Rupee trades under pressure as the covid crisis continues and cases top 24 million and deaths remain over 4000 for a third straight day.

Indian stocks are set for a weekly decline amid on going concerns over the impact of the covid crisis and falling commodity prices.

India’s foreign exchange reserves surged by $32.29 billion in the six months to the end of March, according to the latest data from the Reserve Bank of India. The reserves increased to $536.693 billion at the end of March, up from $502.162 billion in September. Higher reserves are supportive of the Rupee.

The US Dollar is trading lower across the board on Friday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.2% at the time of writing at 90.56 extending losses from yesterday.

The US Dollar continues to move lower despite rising inflation data in the previous session. US producer price index, which measures inflation at wholesale level jumped by 0.6% month on month in April, twice the rate expected. On an annual basis, PPI rose 6.2%, its biggest rise since records began in 2010.

The jump in inflation comes following the highest level of consumer price inflation in 13 years on Wednesday.

However, the market reaction was different, with the greenback selling off. Strong US jobs data and plenty of reassurance from the Federal Reserve that high inflation will be transitory has pulled the US Dollar lower.

Attention will now turn to US retail sales and consumer confidence data.