• Indian Rupee (INR) declines as oil prices soar
  • OPEC+ failed to agree an output cut
  • US Dollar (USD) rises after 4th July extended weekend
  • US FOMC minutes in focus on tomorrow

The US Dollar Indian Rupee (USD/INR) exchange rate is pushing higher snapping a two day losing streak. The pair lost 0.3% in the previous session, settling at 74.28. At 11:40 UTC, USD/INR trades +0.35% lower at 74.53.

The Rupee trades under pressure amid surging crude oil prices. Crude oil trades at an almost 3 year high after the OPEC+ group failed to agree to an output increase, at a time when global oil demand is surging and supply remains capped by limited output.

The oil cartel abandoned talks after bitter infighting as the group failed to unanimously agree to ease production curbs put in place across the pandemic. As a result, the price of oil sky rocketed, which is bad news for countries like India that import oil. Furthermore, rising oil prices are boosting inflationary pressures, at a time when the Reserve Bank of India is trying to keep interest rates low to support the recovering economy.

The US Dollar is pushing higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.12% at the time of writing at 92.34 paring losses from the previous session.

The US Dollar is edging higher as America returns from its extended 4th July weekend. A slight risk off mood in the market, with equity futures moving lower,  is supporting the greenback.

The US Dollar declined steeply at the end of last week as investors digested the latest jobs report. Despite a larger than expected increase in jobs added in June, investors didn’t consider the report strong enough to accelerate the Fed’s timeline to tightening monetary policy. As a result, the US Dollar slipped lower.

The Fed will remain in focus as investors look ahead to the release of the minutes from the latest Federal Reserve monetary policy meeting. This was the meeting which the Fed adopted a surprise hawkish shift, so investors will be dissecting the minutes for any further clues.