• Indian Rupee (INR) rises on upbeat market mood
  • Evergrande avoids default
  • US Dollar (USD) eases back on safe haven outflows
  • US services & manufacturing PMIs due

The US Dollar Indian Rupee (USD/INR) exchange rate is heading lower on Friday, paring gains from the previous session. The pair settled +0.2% lower on Thursday at 74.86. At 11:00 UTC, USD/INR trades -0.2% at 74.71. The pair is on track to lose 0.4% across the week, the second straight week of losses.

The Indian Rupee is rising higher amid a risk on mood in the market. The surprise interest payment by indebted Chinese property giant Evergrande means that it has avoided default for now, boosting risk sentiment. Fears had been rising that a default from China’s second largest property developer could have much broad implications across the Chinese property sector, which makes up around 30% of the Chinese economy.

Indian equities are also on the rise as banks and car makers gains. Despite the rise in equities today, both the Sensex and the Nifty 50 are set to book losses across the week, the first weekly loss in three weeks on concerns over rising commodity inflation.

The US Dollar is trading lower across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.1% at the time of writing at 93.64. The greenback is set to end the week -0.3% lower, the second consecutive week of declines.

The US Dollar is easing lower as investors ditch the safe haven for riskier assets and currencies. Upbeat earnings in the US, encouraging jobless claims numbers and the Evergande news are keeping the mood upbeat.

US initial jobless claims fell to the lowest level since the start of the pandemic at 290,000.  This was the second straight week that the number of Americans filing for unemployment benefits remained below 300,000. This latest data shows the considerable progress in the labour market recovery.

Attention now turns to the US services and manufacturing PMIs which are expected to show a slight slowdown to growth.