- Indian Rupee (INR) eases on risk off trade
- Concerns over global economic growth are on the rise
- US Dollar (USD) rises after hawkish Fed comments
- US JOLTS job openings data due.
The US Dollar Indian Rupee (USD/INR) exchange rate is charging higher for a consecutive day on Wednesday. The pair settled +0.50% higher on Tuesday at 73.44 towards the high of the day. At 11:30 UTC, USD/INR trades +0.18% higher at 73.57.
The Indian Rupee edged moved lower in risk off trade across the financial markets. Risk sentiment has taken a turn for the worse as investors grow nervous over the health of the global economic recovery. As a result, investors are selling out of riskier assets and currencies such as the Rupee.
Worries of slowing growth in the US, the world’s largest economy came following a downgrade from Goldman Sachs cut its US GDP outlook for the second time in a month following the weaker than forecast US jobs report on Friday. Economists at the bank now see the US economy growing 5.7% in 2021, down from 6.2% previously.
Meanwhile, according to analysts at Standard and Poor, India’s economic growth is expected to remain strong in the coming quarters. Inflation is also likely to remain elevated.
The US Dollar is pushing higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.18% at the time of writing at 92.68 extending gains from the previous session.
The US dollar is rising tracing treasury yields higher. The US Dollar fell sharply following the more dovish stance from Fed Chair Powell at the Jackson Hole and following the weak US jobs report. However, the risk is that the market is underestimating a move by the Fed which could explain the move higher.
St Louis Fed President James Bullard said that the central bank should go forward with plans to taper bond purchases this year.
Data wise investors will be looking towards the release of US JOLTS job openings for further clues over the health of the US labour market. Job openings are expected to remain around 10 million.