inr-bank-notes - INR
  • Indian Rupee (INR) extends losses for a fifth consecutive session
  • India WPI soars to 12.94%
  • US Dollar (USD) edges lower but remains near weekly high
  • FOMC could start to consider tapering support

The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a fifth straight session on Monday.  The pair rallied 0.5% across the previous week, settling on Friday at 73.24. At 11:00 UTC, USD/INR trades +0.02% higher at 73.25.

The Indian Rupee is tracing domestic equities lower, even as covid cases reach a two month low and as pandemic restrictions are gradually eased. Instead the benchmark indices declined as all Adani Group stocks opened sharply lower.

The Indian Economic Times reported that the National Security Depository had frozen the accounts of three foreign funds which had a total investment of 435 billion Rupees in Adani Group companies.

Separately, according to government data, India’s wholesale inflation surged to 12.94% year on year in May, up from 10.49% in April. The jump higher was mainly owing to a spike in oil prices. Fuel prices have jumped by 37.6% year on year in May.

Oil prices continue rising at the start of the week. Crude oil trades at a fresh two year high, extending gains for a fourth straight week. A strong demand outlook as countries continue to ease lockdown restrictions is lifting the price.

The US Dollar is trading higher versus the Rupee. However, it is trading on the back foot versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.08% at the time of writing at 90.50.

The US Dollar is edging mildly lower, but still trades around its highest levels in a week as investors look ahead to the Federal Reserve monetary policy announcement on Wednesday.

The Fed meeting is even more highly anticipated than usual as expectations rise that the Fed could start to signal a pivot towards a less dovish monetary policy. The meeting comes after a fresh surge in CPI inflation in May. However, the jobs market continues to print softer than forecast data.

There is no high impacting US data today so jitters surrounding Wednesday’s decision are likely to dominate.