- Indian Rupee (INR) rises tracing equities higher as covid cases fall
- Reports emerge of an economic stimulus plan
- US Dollar (USD) declines versus majors as Fed tightening concerns fade
- US consumer confidence in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is slipping lower on Tuesday after booking small gains in the previous session. The pair settled +0.02% higher on Tuesday at 72.83 around the low of the day. At 10:00 UTC, USD/INR trades -0.08% lower at 72.77.
The India Rupee is strengthening, tracing domestic equities higher. The mood surrounding Indian assets is improving as covid cases fall to the lowest level in over month. New daily covid cases are just under 200,000, down significantly from the 400,000 a month earlier. Meanwhile deaths rose by 3,511.
The Nifty 50 closed the day +0.4% higher whilst the Sensex closed up. 0.3%.
Adding to the upbeat mood is a report by Bloomberg that India is preparing an economic stimulus package for the sectors worst affected by the pandemic. The finance ministry is looking at plans to boost tourism, aviation and hospitality sectors in addition to small and medium sized firms.
There has been no time-line announced yet for the relief. Talks are still in early stages.
The US Dollar is trading lower across the board on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.25% at the time of writing at 89.62 as it tumbles to a four and half a half month low.
The US Dollar is falling as inflation concerns continue to ease. Federal Reserve speakers were once again calming market nerves on Monday, insisting that any spike in inflation would be temporary. This means that policy is likely to stay pat for the now.
Falling commodity prices, particularly base metals are helping inflation fears to fade as well.
Attention will now turn to US consumer confidence data due later today. Analysts expect to see a slight tick lower in morale to 119.4 in May, down from 121.7 in April.