- Indian Rupee (INR) eases after RBI minutes show continued support
- Morgan Stanley see the RBI tightening policy from Q1 next year
- US Dollar (USD) extends gains on taper expectations & safe haven flows
- US looks to Jackson Hole Economic Forum at the end of the month
The US Dollar Indian Rupee (USD/INR) exchange rate is heading higher on Friday extending gains from the previous session. The pair settled +0.12% happy at 74.37. At 14:30 UTC, USD/INR trades +0.04% lower at 74.40.
The Indian Rupee is coming under pressure once again in risk off trade. Concerns over rising covid cases across Asia are weighing on demand for risker currencies.
The minutes from the latest Reserve Bank of India’s monetary policy meeting revealed that the RBI considers that India needs continued monetary support for the economy. The focus should remain on the revival of growth.
The minutes come following investment bank Morgan Sanely saying in a note that they expect that the RBI will start hiking interest rates from the first quarter of the next calendar year, starting policy normalization. Analysts at the bank consider that a more robust recovery will see inflation pressures build.
The US Dollar is trading higher across the board on Friday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.07% at the time of writing at 93.68 in its fifth straight day of gains.
The US Dollar is pushing higher hitting fresh nine and a half month highs on safe haven flows and amid expectations that the Fed will start to tighten monetary policy by the end of the year. I
The FOMC minutes earlier in the week revealed that policy makers at the US central bank are more comfortable with tightening monetary policy by the end of the year,
Fears are growing that the Fed will start tapering bond purchases just as covid cases are on the rise and starting to hamper the global economic recovery.
There is no high impacting data due this afternoon. Looking ahead attention will be turning towards Jackson Hole Economic Forum at the end of the month.