- Indian Rupee (INR) traces domestic equities higher
- Bad loans could rise to 8-9%
- US Dollar (USD) falls on weak run of data
- US housing starts & factory output disappoint
The US Dollar Indian Rupee (USD/INR) exchange rate is heading lower on Tuesday, paring strong gains at the start of the week. The pair settled 0.3% higher on Monday at 75.19. At 15:00 UTC, USD/INR trades -0.15% at 75.07.
The Indian Rupee traced domestic equities higher on Tuesday. Indian shares advanced, lead by technology stocks to fresh record highs. The upbeat mood towards Indian assets comes as investors focus on the tail winds expected from festival season and earnings growth.
The US Dollar is heading lower across the board on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.17% at the time of writing at 93.77 up slightly from the three week low of 93.50.
However, concerns over the health of the economy remain. CRISIL rating agency warned that Indian banks face an 8% -9% rise in bad loans, up from 7.5% last year. Lat year the Reserve Bank of India allowed banks to offer 6-month moratorium to all small borrowers.
The Indian economic calendar is relatively quiet with no high impacting releases due until Friday when the monetary policy meeting minutes are due to be released.
The US Dollar came under pressure as US economic data continues to deteriorate. Today data revealed that US homebuilding unexpectedly fell in September and permits dropped to a one year low. The decline came amid an acute shortage in raw materials and labour. The data added to evidence that economic growth could be slowing owing to ongoing supply chain issues.
Yesterday US industrial production unexpectedly fell sharply, contracting -1.3% month on month in September. Analysts had expected growth of 0.2%. The contraction in output comes amid supply chain issues and shortages in semiconductors which slowed vehicle production.
There is no further high impacting data due for release today. The risk on mood in the broader market is also weighing on demand for the greenback.