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INR bank notes
  • Indian Rupee (INR) rises as domestic equities jump
  • FDI hit a fresh high in the year ending March 2021 of $43,366 billion
  • US Dollar (USD) declines as inflation fears ease
  • US manufacturing and services PMI data awaited

The US Dollar Indian Rupee (USD/INR) exchange rate is extending losses on Friday for a second straight session. The pair settled -0.27% lower on Thursday at 73.01 at the low of the day. At 11:00 UTC, USD/INR trades -0.3% lower at 72.88. The pair is set to book -0.7% losses across the week.

The Indian Rupee is tracing the domestic equity market high on Friday. Stocks surged higher, helped by a rebound in financials and as new covid cases remained below 300,000 for a 5th consecutive day.

With cases continuing to fall optimism is growing that restrictions will soon be eased. The stocks which are most impacted by lockdown such as automobiles, retail and banking are seeing a lot of buying interest.

The Nifty 50 and the Sensex closed 2% higher.

Net Foreign Direct Investment into the country hit a fresh high of $43,366 billion in the year ending March 2021 according to data from the Reserve Bank of India.

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 -0.14% at the time of writing at 89.68 around multi-month lows.

The US Dollar is trending lower on Friday and is heading for a weekly loss as fears over rising inflation and an earlier move by the Fed ease. Even if the Fed do move towards tapering bond purchases, any rise in interest rates is still a long time off, with no hikes expected until next year at the earliest.

Data this week has continued to show that the US economic recovery is on the right track. Yesterday US jobless claims fell to the lowest level since the pandemic. 444,000 Americans applied for unemployment benefit last week. This was down from 473,000 in the week before and was also ahead of forecasts of 450,000.

Attention will turn to US PMI data which is expected to show that business activity in American continues to expand at a solid pace.