- Indian Rupee (INR) snaps a two day winning streak despite government vaccine pledge
- Indian equities ease lower
- US Dollar (USD) rises as Fed taper talk expectations linger
- US CPI data later in the week is eyed
The US Dollar Indian Rupee (USD/INR) exchange rate is advancing on Tuesday snapping a two day losing streak. The pair settled -0.1% lower on Monday at 72.78. At 11:00 UTC, USD/INR trades +0.15% higher at 72.89.
The Indian Rupee is tracing domestic equities lower, although it is finding some support from falling oil prices and the government’s promise on vaccines..
Indian shares retreated from record highs, pulled lower by financials and energy stocks. The Nifty 50 fell -0.2% whilst the Sensex closed -0.3% lower although both benchmarks have seen a strong start to the year gaining 13% year to date.
Oil prices were also on the back foot after data revealed that Chinese imports of oil declined 14.6% year on year in May raising questions over the strength of the demand recovery, particularly in Asia. West Texas Intermediate trades -0.6%.
Losses in the Rupee were also capped by the government’s pledge to provide free covid vaccines to all adults in an attempt to control the pandemic which has swept across the country.
The US Dollar is trading higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.14% at the time of writing at 90.17 as recoups losses from the previous session.
The US Dollar is edging higher in relatively subdued trade having found some support following the weaker than forecast non farm payroll data on Friday. The US Dollar index continues to hover around 4 month lows as investors look ahead to Thursday’s CPI inflation data and attempt to gauge the Federal Reserve’s next move.
Concerns remain that the Fed will start to discuss tapering support at the next Fed meeting later this month. This is keeping the greenback supported.
The US economic calendar is light on Tuesday with just US trade balance due along with JOLTs job openings.