• Indian Rupee (INR) rises after losses last week
  • Domestic equities rise, approaching their all time high
  • US Dollar (USD) rises in slow trade and low volumes
  • US markets closed for Martin Luther King days

The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher on Monday, after booking losses across the previous week. The pair loss -0.16% across last week settling on Friday at 74.15. At 13:00 UTC, USD/INR trades +0.19% at 74.29.

The India Rupee trades under pressure despite domestic equities rising to an almost three month high. Strong gains in automakers and in UltraTech Cement after upbeat earnings helped drive Indian indices to the highest close since October. Both the Sensex and the Nifty 50 are just 1.5% off the all time high after booking gains for the past 4 straight weeks.

Meanwhile oil prices have acted as a drag on the Indian Rupee. Oil prices has rallied over 6.5% across the past week amid expectations of tighter supply as the OPEC+ group struggle to reach higher output targets.

Separately COVID cases in India’s main cities have recorded a sharp fall in COVID infections over the past two days according to authorities suggesting that the peak could have already passed in cities.

The US Dollar is rising 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 95.29 after falling across the previous week.

The US Dollar fell last week amid fears that the US economy would not be able to stand the three or four rate hikes that the Federal Reserve is considering for 2022. The Fed are looking to take an aggressive stance towards tightening monetary policy after inflation reached 7%.

US retail sales unexpectedly tumbled in December as Omicron cases and inflation surged. Sales fell -1.9% month on month, well short of the 0% forecast.

Today the US Dollar is drifting higher in quiet trade with both the US equity and bond market closed for Martin Luther King Day. There is no high impacting US economic data.