- Indian Rupee (INR) rises as market mood improves on upbeat Fed
- Domestic equities rise, oil rise
- US Dollar (USD) falls after Fed speed up taper
- US jobless claim, PMIs due
The US Dollar Indian Rupee (USD/INR) exchange rate is moving lower snapping a five day winning run. The pair settled +0.39% higher on Wednesday at 76.34. At 10:00 UTC, USD/INR trades -0.34% at 76.07.
The Indian Rupee is rising, tracing domestic equities higher. The risk on mood in the market is boosting demand for risker assets and currencies such as the Rupee.
Sentiment has taken a turn higher after the US Federal Reserve signaled confidence in the global economic recovery from the pandemic.
The Nifty 50 trades higher after 4 straight days of declines.
Meanwhile the oil prices are heading higher, capping gains in the Rupee. West Texas Intermediate trades 1% higher at the time of writing.
The US Dollar is trading lower across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.35% at the time of writing at 96.18 extending losses from the previous session.
The U.S Dollar is slipping back the day after the Federal Reserve announced that it will taper its monthly bond purchases as a faster pace. The US central bank will taper $30 billion as month from January, double the $15 billion announced in November. At the new faster pace, the Fed will end the bond buying programme in March 2022, rather than the June end initially planned for.
As a result, the Fed could start hiking interest rates sooner and now expects three rate rises across 2022, and a further three rate hikes in 2023.
The US Dollar fell following the announcement suggesting that investors were expecting the Fed to adopt an even more hawkish stance.
Looking ahead, there is plenty of data for investors to digest including jobless claims and PMI data. Expectations are for jobless claims to rise slightly to 194,000.
