- Indian Rupee (INR) traces equities higher
- Indian covid cases continue declining
- US Dollar (USD) slips tracing yields lower
- US CPI tomorrow in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is advancing on Wednesday extending gains for a second straight session. The pair settled +0.2% lower on Monday at 72.95. At 11:00 UTC, USD/INR trades +0.03% higher at 72.97.
The Rupee is being supported by rising domestic equities. Indian share rose on Wednesday boosted by heavyweight financials amid improving risk appetite. Risk sentiment is rising as covid cases in the country are falling.
The Nifty 50 closed 0.2% higher with the banking sector a sector closely tied to the health of the Indian economy jumping 2% in early trade.
Meanwhile daily covid cases continue to decline. India recorded 92,596 new daily infections over the past 24 hours, with cases below the 200,000 level for a week.
Rising oil prices acted as a drag on the Rupee. West Texas Intermediate jumped over $70 for the first time since 2018 on rising demand expectation.
The US Dollar is trading mildly higher versus Rupee. However, it is trading mildly lower versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.1% at the time of writing at 89.98.
The US Dollar is tracing bond yields lower. The yield on the benchmark US treasury yield trades at it lowest level in around 7 months, even as inflationary pressures show signs of rising.
Data in the previous session revealed that JOLTs job openings rose by 1 million t o 9.3 million a record level. Meanwhile non farm payroll data on Friday revealed that the unemployment rate was 5.8% still some way off the 3.8% pre-pandemic level. The jobs are there but they are not being filled, so firms could be forced to hike wages in order to attract applicants.
There is no high impacting US data due to be released today. Investors will look cautiously ahead to tomorrow’s CPI inflation data.