• Indian Rupee (INR) slips as domestic equities decline
  • Britannia drops 2.6% after reporting a loss in the quarter
  • US Dollar (USD) edges lower versus major peers
  • US PPI inflation due

The US Dollar Indian Rupee (USD/INR) exchange rate is heading higher on Monday, after two straight days of declines. The pair settled -0.36% on Monday at 73.90. At 10:00 UTC, USD/INR trades +0.21% at 74.06.

The Indian Rupee is tracing domestic equities lower. Indian shares dropped lower dragged down by weakness in financial stocks and a drop in Britannia Industries after a disappointing earnings report.  Britannia fell 2.6% after reporting a decline in September quarter profits and whilst also highlighting unprecedented inflation in market prices.

Oil prices are also on the rise for a third straight session. Oil prices remain supported by tight supply after OPEC+ failed to lift output further than the 400,000 barrels per day agreed back in July.

The US Dollar is trading higher versus the Rupee but is trading lower versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.1% at the time of writing at 93.95.

The US Dollar is trading on back foot for the third straight day as it continues to ease back from a year to date high reached on Friday following the non-farm payroll report.

The Fed’s dovish outlook which revealed that the Fed policy makers were in no rush to raise interest rates, has acted as a drag on the currency, However, the broad risk off mood in the market has helped to limit losses today, with equity indices heading lower.

Looking ahead attention will be on US producer price index, which measure inflation at a wholesale level. Expectations are for PPI to rise 0.5% month on month, up from 0.3% in September. On an annual basis PPI is expected to rise 8.7% up from 8.6%.

The data comes ahead of tomorrow’s consumer price index inflation data. Strong readings could boost bets of a Fed rate hike.