- Indian Rupee (INR) holds steady despite rising domestic equities
- Oil prices rebound
- US Dollar (USD) eases ahead of the Fed policy meeting
- US housing starts and building permits due
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady Tuesday for a second straight session. The pair settled +0.01% higher on Tuesday at 73.64. At 11:30 UTC, USD/INR trades +0.01% lower at 73.65.
Whilst global stocks markets across the globe sold off on Monday in risk off trade, the Indian Rupee remained resilient. Concerns over the potential fallout from a likely default from Evergrande, China’s second largest property developer hit risk sentiment in the previous session.
Foreign institutional investors were net buyers in the capital markets offering some support.
Today Indian equity markets closed higher. The Sensex rallied 0.9% to 59,005. The Nifty 50 also closed 0.84% higher.
Meanwhile oil prices are on the rise. West Texas Intermediate trades 1% higher, paring some of the losses from the previous session.
The US Dollar is steady versus the Rupee but is edging lower versus its major peers on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.8% at the time of writing at 93.15 although it continues to trade around multi-week highs.
The US Dollar on the back foot as investors look ahead to the crucial Federal Reserve monetary policy announcement tomorrow. The fed will start the two-day meeting later today so the US Dollar is expected to trade within a tight range over next coming 36 hours until the Fed’s press conference tomorrow.
The broad expectation is that the Federal Reserve will provide further clues over when it will start tapering its bond purchases.
There are a few mid-tier data points due later today in the form of housing starts data and housing permit numbers. Whilst the numbers will shed some light on the health of the housing market they are not expected to create ripples in the FX market.