- Indian Rupee (INR) extends losses
- Oil prices threatens India’s recovery
- US Dollar (USD) rises as consumer confidence surges
- US ADP payrolls in focus tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is edging higher on Tuesday for a fourth straight session. The pair gained 0.08% on Monday, settling at 74.27. At 11:40 UTC, USD/INR trades +0.04% lower at 74.30.
The Indian Rupee continues to steadily weaken versus the greenback. Rising oil prices and falling domestic equities weighed on demand for the Indian currency.
Indian shares ended the session lower for a second straight session on Tuesday, weighed down by loses in financial stocks. Both the Sensex and the Nifty 50 ended the session -0.4% lower. Equity markets have struggled to find their feet after hitting a post covid high.
Covid cases continue to decline, and the vaccination rate is ramping up quickly. However, rising covid cases in other parts of Asia is dragging on sentiment.
Elsewhere, oil prices continue rising adding pressure to the Rupee. Concerns are growing that surging oil prices and rising government levies could send inflation surging and threaten India’s economic recovery.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.25% at the time of writing at 92.12.
The US Dollar is on the rise amid impressive consumer confidence data. Consumer confidence surged in June to fresh pandemic high as Americans became increasingly more upbeat about the outlook for the US economy and the jobs market.
The Conference Board index surged to 127.3 in June from an upwardly revised 120 in May. This was well above analysts’ estimates.
The successful vaccine rollout and subsequent re-opening has resulted in optimism growing surrounding vacations plans and increased spending which will aid with the economic recovery.
There is no further US economic data for investors to digest today. Instead, attention will turn towards tomorrow’s ADP private payroll data. This is considered a good lead indicator ahead of Friday’s closely watched non-farm payroll.
