inr-currency-symbol - INR
  • Indian Rupee (INR) strengths as domestic equities rally
  • Sensex hit 60,000
  • US Dollar (USD) rises on safe haven flows
  • US new home sales due

The US Dollar Indian Rupee (USD/INR) exchange rate is heading lower on Friday after a flat finish in the previous session. The pair rose settled on Thursday at 73.75. At 11:30 UTC, USD/INR trades -0.07% lower 73.74.

The Indian Rupee is managing to gain ground versus the safe haven US Dollar despite risk off traded. Concerns over the Chinese debt ridden firm Evergrande have resurfaced, which have driven a risk off move in the financial markets.

Evergrande was expected to pay the coupon on its bond yesterday, so far today it hasn’t been paid. Fears of contagion and a spread across the wider financial system is hurting sentiment.

The Rupee has traced Indian domestic equities higher, which have also brushed off the risk adverse mood with the Sensex cross 60,000 for the first time. The index is being boosted by banking stocks and tech stocks and put the index on track for its fifth straight week of gains.

Concerns over the Evergrande situation were being overshadowed by the fact that the US Federal Reserve didn’t start to taper.

The US Dollar is lower versus the Rupee. However, the greenback is rising versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.08% at the time of writing at 93.13 clawing back some losses the previous session.

The US Dollar is finding support amid a cautious mood in the market. The greenback is attempting to recover from yesterday’s selloff following the FOMC. The Fed pushed back on announcing tapering of its bond buying programme, but did suggest that it would start soon.

Yesterday data revealed that the US business activity grew at the slowest pace in 12 months in September. Supply chain disruptions and labour issues are creating a headache for businesses. The IHS Markit Composite PMI fell to 54.5down from 55.4 in August.

There is no high impacting US data due to be released. New home sales could attract some attention.