- Indian Rupee (INR) rises as domestic equities surge for a 2nd day
- Signs that the Indian covid peak has passed
- US Dollar (USD) falls on more dovish Fed talk
- US FOMC minutes due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is moving firmly southwards on Tuesday, after small gains in the previous session. The pair settled 0.05% higher on Monday at 73.33 towards the high of the day. At 11:00 UTC, USD/INR trades -0.4% lower at 73.04.
The Rupee trades at a two and a half month peak as domestic equities charge higher and the US Dollar weakens. India’s bluechip Nifty 50 index climbed to a two-month high thanks to gains in financial and metal stocks as covid cases remained below 300,000 for a second consecutive day.
The Nifty 50 closed 1% higher, whilst the Sensex rallied 0.97%, extending gains of 1.7% in the previous session.
Covid cases rose by 263,533 over the past 24 hours in India, suggesting that the worst of the pandemic could be over.
Separately, the Reserve Bank of India said that the biggest hit to the economy from the second wave has so far been the hit to demand, with a loss of mobility, discretionary spending and employment.
The US Dollar is trading steeply lower across the board on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.38% at the time of writing at 89.83 its fourth straight session of losses.
The US Dollar trades under pressure amid the continued dovish verse coming from the Fed. Dallas Fed Kaplan, reassured the market by saying that he didn’t expect interest rates to move higher until next year. Federal Reserve Vice Chair Richard Clarida also pointed to the soft US jobs data as a sign that the US economy wasn’t ready for support to be withdrawn.
There is no high impacting US data due to be released today. Instead, investors will look ahead to the release of the minutes to the latest Federal Reserve rate setting meeting.