- Indian Rupee (INR) extends losses
- Oil prices continue to add pressure to Rupee
- US Dollar (USD) rises after upbeat consumer confidence data
- US ADP payrolls data in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is pushing higher for a fifth straight session on Wednesday. The pair gained 0.03% in the previous session, settling on Tuesday at 74.29. At 11:40 UTC, USD/INR trades +0.15% lower at 74.42
The Indian Rupee came under pressure despite a stronger domestic equities market and as rising crude oil prices weighed on investor sentiment.
The Sensex and the Nifty 50 both trade 0.4% higher on the day at the time of writing. Foreign institutional investors were net buyers in the capital markets.
Oil prices continue to add pressure to the Rupee. Oil prices continue to trade around two and a half year highs. As countries reopen their economies, fuel demand has picked up driving the demand outlook higher.
India’s fuel demand, which was hit by the second wave of covid is expected to reach pre-pandemic levels by the end of 2021.
The US Dollar is rising 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 92.12 extending gains for a fifth straight session.
The US Dollar rallied on Tuesday following upbeat US consumer confidence numbers. Data revealed that US consumer morale surged in June hitting a fesh post pandemic high. As the economy reopens Americans are becoming more upbeat about the economy and jobs market.
The consumer confidence index increased to 127.3 up from 120 in May.
The increase in covid cases in Asia is also supporting the US Dollar, boosting safe haven inflows.
Looking ahead attention will now shift towards the ADP private payroll numbers due later today. The private sector is expected to have created 600,000 new jobs in June, down from 978,000 in the previous month.
A strong ADP payroll number could add pressure to the Fed to hike interest rates, boosting the US Dollar further.
