- Indian Rupee (INR) rises after steep losses last month
- Foreign inflows amid upcoming IPOs could under pin the currency
- US Dollar (USD) steadies after losses
- US Fed speakers in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is heading lower on Wednesday, extending losses for a second day. The pair settled -0.09% lower on Tuesday at 75.12. At 12:00 UTC, USD/INR trades -0.3% at 75.87.
The Rupee is strengthening versus the US Dollar as its attempts to claw back some of the losses booked last month and at the start of this month. The Rupee shed 1.7% versus the greenback in September and is so far still down around 1% this month.
Higher oil prices and rising local demand has seen imports rise. India’s trade deficit rose to an all time high in September. Meanwhile oil imports jumped 200%.
Whilst rising oil prices have been a headwind analysts are optimistic that foreign inflows over the coming weeks and month could help to under pin the Rupee. For example Warren Buffet backed Paytm is plans to raise some $10 billion in an IPO.
The US Dollar is trading lower across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.03% at the time of writing at 93.78.
The US Dollar has steadied on Wednesday although failed to advance amid a broad risk on mood in the market which dampened demand for safe have assets.
Earnings season in the US has gotten off to a good start which is keeping the market mood buoyant.
However, the US Dollar has been under pressure more broadly as expectations for a rate hike from the Fed have been tempered. Whilst inflation remains elevated, the concern is that the economic recovery is not strong enough to sustain a rate rise just yet. As a result, treasury yields have eased slightly.
Looking ahead there is no high impacting US data due to be released today. Instead investors will once again to looking towards speeches from Fed officials for further clues and insight into the Fed’s plan for monetary policy.
