• Indian Rupee (INR) eases after surging across August
  • IPO’s and RBI management lifted the currency
  • US Dollar (USD) extends gains but hovers around monthly lows
  • No high impacting US data today.

The US Dollar Indian Rupee (USD/INR) exchange rate is charging higher for a second straight session on Tuesday. The pair settled +0.12% higher on Monday at 73.07 towards the high of the day. At 11:30 UTC, USD/INR trades +0.45% higher at 73.40.

After gaining almost 2% across August the run higher for the Rupee appears to be slowing. A flurry of initial public offerings on the Indian stock exchange drove demand for the Rupee. Speculation has also picked up that the Indian central bank is relaxing control over the currency. Finally, the Rupee benefitted from the weaker US Dollar after Fed Chair Powell adopted a more dovish than expected tone at Jackson Hole.

After the strong run analysts are suggesting that the Rupee could now come under pressure. UBS strategists expect the currency to weaken by around 5% by the end of the year.

The US Dollar is pushing higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades+0.20% at the time of writing at 92.22 extending gains from the previous session.

The US bank holiday on Monday limited movement in the forex market. The greenback is edging higher but remains near its lowest level in a month following he significantly weaker than forecast US labour market report on Friday.

The US saw just 235,000 new jobs created in August, far short of the 750,000 that analysts had forecast and the over million created in July.

The weak report points to the US Federal Reserve delaying the start of tapering its asset purchase programme.

There is no high impacting US economic data due to be released today or tomorrow. Investors will look ahead to Fed speakers on Thursday for further clarification on when the Fed could move to taper bond purchases.