- Indian Rupee (INR) extends losses for a 2nd session
- Oil rally continues as Brent approaches $75
- US Dollar (USD) rises ahead of Powell testimony
- Powell’s comment on inflation will be watched closely
The US Dollar Indian Rupee (USD/INR) exchange rate is pushing firmly higher on Tuesday after muted gains in the previous session. The pair settled +0.05% on Monday at 74.10. At 11:00 UTC, USD/INR trades +0.3% lower at 74.35.
The Indian Rupee slips lower for a second straight session owing to US Dollar strength and rising oil prices.
West Texas Intermediate rallied over 2% in the previous session whilst Brent is hovering around the psychologically important $75 level. Oil continues to be supported by rising demand expectations as countries reopen and travel ramps up.
Elsewhere Indian domestics equities pushed higher. The Sensex passed 53,000 for the first time as investors cheered a record surge in daily covid vaccinations. Indian administered a record 8.3 million vaccine doses on Monday amid a strong push from the government to inoculate all adults.
The US Dollar is rising across the board on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.2% at the time of writing at 92.06 paring losses from the previous session.
The US Dollar is climbing higher as investors remain focused on inflation and the Federal Reserve’s next steps. Fed Chair Jerome Powell is due to testify before Congress later today. In pre-released remarks yesterday, Powell reassured that the Fed considers inflation to be transitory. His comments came after the hawkish surprise in last week’s Fed meeting and pushed the US Dollar lower.
The move southwards proved to be short lived and the greenback is once again on the rise. Today Fed Powell will update Congress on the Fed’s monetary policy support through the pandemic. He is expected to outline the improving picture for the US economy. Although it will be any comments regarding inflation that will be most closely watched and have the most potential to move the US Dollar.