- Indian Rupee (INR) rises on upbeat RBI outlook
- RBI foreign exchange reserves data due
- US Dollar (USD) rallies after US retail sales unexpectedly rise
- US Michigan confidence data due
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower on Friday paring gains from the previous session. The pair settled +0.2% higher on Thursday at 73.57. At 11:30 UTC, USD/INR trades -0.1% lower at 73.49. The pair is set to end the week roughly at the same level that it started the week.
The Indian Rupee is moving higher as it reacts to the Reserve Bank of India’s Bulletin from yesterday. The RBI was upbeat regarding the outlook for the Indian economy as the second wave of covid eases and momentum in the economy picks up.
Meanwhile geopolitical tensions with China could cap gains in the Rupee. India has warned China that bilateral relations will only develop when China pulls its troops back from confrontations on the disputed border in the Himalayan mountains.
Looking ahead attention will now turn to the release of foreign exchange reserves data from the RBI.
Indian equity markets closed marginally lower, the Nifty down 0.25% and the Sensex 0.2% lower.
The US Dollar is mobbing lower 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 92.81, steadying after yesterday’s gains.
The US Dollar jumped higher on Thursday after US retail sales defied expectations and rebounded in August. Sales rose 0.7% boosted by back to school shopping and child tax payments from the government. The rise in sales comes despite a slump in consumer confidence.
The US Dollar rose on the back of the stronger data amid rising expectations that the Federal Reserve could look to make an announcement regarding the tapering of bond purchases as soon as next month.
Looking ahead attention will be on US Michigan confidence data due later today. Expectations are for a tick higher to 72.2, up from 70.3.
