- Indian Rupee (INR) falls at the start of the week, equities trade flat
- RBI minutes reveal some concerns over rising oil prices
- US Dollar (USD) rebounds on high inflation concerns
- US Q3 GDP due on Thursday
The US Dollar Indian Rupee (USD/INR) exchange rate is heading higher on Monday for the third straight day. The pair settled +0.17% higher on Friday at 74.99. At 15:00 UTC, USD/INR trades +0.16% at 75.11.
The Rupee is edging lower again on Monday failing to book gains against a stronger greenback. Indian equities ended flat providing little inspiration for the Rupee.
Meanwhile oil prices continue to surge higher hitting fresh multi-year highs. West Texas Intermediate trades over 1.2% higher, adding to gains across the previous week. This is bad news for India which imports over 80% of its oil.
Lat week the minutes from the latest Reserve Bank of India meeting revealed that the central bank is focus on bringing inflation back down to 4% from the over 6% that it was in May and June. However, high oil prices is raising the risk of higher petrol prices spilling over into higher transport costs.
The US Dollar is trading higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.19% at the time of writing at 93.82, rebounding after losses across the previous week.
The US Dollar is pushing higher at the start of the week as inflation concerns build. A jump higher in oil prices to fresh multi-year highs, combined with a warning from Fed Chair Powell on Friday that elevated inflation could be around for longer than initially expected has lifted US treasury yields. The greenback is tracing yields higher. Jerome Powell also said that now wasn’t the time to start raising interest rates.
There is no high impacting US data due for release today. Investors are looking ahead to third quarter GDP data for further clues over the health of the US economic recovery. Any sign of a slowdown could raise concerns over stagflation whilst prices continue to spiral higher.