• Indian Rupee (INR) struggles to gain as oil prices remain high
  • Domestic equities offer little direction
  • US Dollar (USD) slips after weaker PCE inflation data
  • US data releases pick up from tomorrow

The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady at the start of the week after booking mild gains last week. The pair gained 0.15% across the previous week settling on Friday at 74.21. At 11:40 UTC, USD/INR trades -0.02% lower at 74.19.

Persistently high oil prices are capping any gains in the Rupee. Oil prices in both benchmarks hit fresh two and a half year highs in early trade on Monday, before easing lower. Fuel demand is surging in the northern hemisphere as economies reopen. Meanwhile the OPEC+output restrictions mean that the supply side is limited.  Later in the week the OPEC+ group will look to address the supply demand imbalance.

Elsewhere, Indian shares wee flat offering little in the way direction for the Rupee. Gains in pharamacurtical stocks were largely offset by weakness in the technology sector.

The US Dollar is falling lower across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.07% at the time of writing at 91.79 extending losses from the previous week.

The US Dollar is edging lower in a quiet start to the week as investors digest rising covid cases and inflation data.

The mood in the market is tepid, equities are heading lower as concerns over rising covid cases in Asia and the UK hit risk sentiment, offering some support to the safe haven US Dollar.

On the other hand, slightly weaker than forecast PCE inflation data on Friday is keeping the pressure on the greenback. US PCE, the Fed’s preferred measure of inflation came in at 0.5% month on month in May, below the 0.6% expected and down from 0.7% in April. The softer print eased concerns that the Federal Reserve could look to move sooner to tighten monetary policy.

This week, starting tomorrow, there is plenty of data for investors to digest ahead of Friday’s closely watched non-farm payroll report.