- Indian Rupee (INR) rises as domestic equities surge for a 2nd day
- Domestic equities snap 3 day wining run
- US Dollar (USD) rises but hovers around multi-month low
- US FOMC minutes are awaited
The US Dollar Indian Rupee (USD/INR) exchange rate is advancing on Wednesday, paring some losses from the previous session. The pair settled -0.38% lower on Tuesday at 73.05 after briefly dipping below 73.00. At 11:00 UTC, USD/INR trades +0.16% higher at 73.17.
The Indian Rupee inched higher versus the US Dollar amid slight weakness in domestic equity markets. Both the Nifty 50 and the Sensex were trading lower in a broad risk off mood in global financial markets as investors await the minutes to the latest US Federal Reserve monetary policy meeting.
The move lower in equities snaps a 3 day winning run, which has seen the Sensex gain 1.4% so far this week.
Oil prices were trading lower for a second straight session after API inventory data showed a surprise build in stock. Concerns over weaker fuel demand in Asia as pandemic restrictions are tightened are also dragging on the price of oil.
The US Dollar is trading higher across the board on Wednesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.15% at the time of writing at 89.93 snapping a three day losing run.
The US Dollar is rising ahead of the FOMC minutes which are due to be released later. However, the greenback continues to hover around multi-month lows. Federal Reserve speakers have been out in force over the past week reiterating the Fed’s dovish message.
The minutes to the latest FOMC meeting are likely to confirm policy member thinking that the US economy still needs support. The US central bank considers that higher inflation will be transitory and therefore is not willing to move on rates, particularly given the weakness in the labour market.
The meeting minutes could keep pressure on the US Dollar and calm inflation fears.