- Indian Rupee (INR) extends losses from the previous week
- RBI rate decision due on Friday
- US Dollar (USD) hold near yearly high versus major peers
- US factory orders later today and NFP
The US Dollar Indian Rupee (USD/INR) exchange rate is pushing higher on Monday extending gains from the previous week. The pair rose +0.4% last week to close on Friday at 74.13. At 10:30 UTC, USD/INR trades up +0.34% at 74.38.
The Rupee is under pressure in risk off trade as debt-ridden Evergrande, the Chinese property firm saw trading in its shares halted in Hong Kong, following on from the property developer missing a coupon payment for the second time last week. Fears of contagion are dragging on risk sentiment at the start of the week.
This week the main focus will be on the Reserve Bank of India which is due to make its monetary policy announcement at the end of the week. According to analyst at Standard Chartered Bank, the RBI could start unwinding its accommodative monetary policy as soon as this week. This, however, is not the consensus view, with most analysts expecting the RBI to start normalizing policy next year.
The US Dollar is trading higher versus the Rupee. However, it is edging lower versus its major peers at the start of the week. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.05% at the time of writing at 93.99.
Despite inching lower the US Dollar continues to hover around yearly highs supported by safe haven flows amid ongoing concerns in the Chinese property sector and ahead of the non farm payrolls later this week.
The US jobs report is expected to show that 460,000 jobs were created in September, this comes after a particularly disappointing report in August with just 235,000 jobs created. A strong number could confirm that the Federal Reserve will start tapering its bond purchases before the end of the year.
Today attention will be on US factory orders which are expected to reveal an uptick in orders to 0.9% in September, up from 0.4% month on month in August.