- Indian Rupee (INR) rises as oil prices drop 1%
- Falling oil prices eases inflation concerns
- US Dollar (USD) falls as Q3 GDP slows more than expected
- Jobless claims reach fresh pandemic low
The US Dollar Indian Rupee (USD/INR) exchange rate is heading lower on Thursday paring gains from the previous session. The pair settled 0.17% higher on Wednesday at 75.06. At 11:00 UTC, USD/INR trades -0.39% at 74.77.
The Indian Rupee is pushing higher helped by a drop in global oil prices, which is calming inflation fears.
West Texas Intermediate trades 1% lower on Thursday after crude oil inventories rise by more than expected and after Iran announce that talks with the West over their nuclear programme will restart by the end of November.
If talks are successful and Iran actually manages to agree a deal with the US, then the oil sanctions on Iran could be lifted and Iranian oil could find itself back on the market.
India imports over 80% of its oil so higher oil prices feed through the economy and hurt consumers whilst widening the account deficit.
The US Dollar is trading lower across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.42% at the time of writing at 93.41 extending losses for a second straight session.
The US Dollar is plunging lower after data revealed that economic growth in the US slowed sharply in the third quarter. Supply chain disruptions and a resurgence of covid in addition to slower consumer spending dragged on growth.
The world’s largest economy grew by 2% on an annualized basis in the July to September period. This marked the weakest quarterly growth since the covid recession last year and came in well below analysts’ forecasts of 2.7%. This was also a steep slowdown from the 6.7% growth achieved in the second quarter.
Meanwhile US jobless claims fell again to a fresh post pandemic low of 281,000, down from 290,000 and below the 290,000 forecast. This suggests that the labour market recovery continues.
Still the fact that the US Dollar is selling off so steeply suggests that investors are pushing back expectations of an interest rate hike.