inr-bank-notes - INR
  • Indian Rupee (INR) falls for a fourth session
  • Domestic equities drop, oil soars
  • US Dollar (USD) rises, tracing treasury yields higher
  • High inflation & Fed fears have returned

The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher on Tuesday for a fourth straight day. The pair rose +0.12% on Monday settling at 74.23. At 13:00 UTC, USD/INR trades +0.46% at 74.57.

The Rupee is trading under pressure as domestic equities slide and as oil prices jump northwards.

India’s Nifty 50 index experienced its worst one-day decline in a month on Tuesday as investors sold out of automobile makers, IT firs and metal producers amid rising concerns over a faster pace of monetary policy tightening across the globe.

Separately the price of oil surged higher on Tuesday as Mid-Eastern tensions escalated. Fears over disruptions to production come at the same time that OPEC+ are struggling to reach the upwardly revised output quotas. West Texas Intermediate rose a multi-year high of $85.15.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.26% at the time of writing at 95.51 building on gains from the previous session.

The US dollar drifted higher yesterday in a quiet session given the Martin Luther King public holiday which saw the equity and bond markets remain closed.

Today traders are back and re-positioning for a more hawkish Fed in the coming months. The US Dollar is tracing treasury yields higher. Both the 2 year and 10 year US bond yields have reach levels last seen prior to the pandemic.

Oil prices jumping to a seven year high has served to remind the markets of the inflation problems which the Federal Reserve is facing.

There is no US data due for release and there are no Fed speakers due to hit the airwaves given the blackout period ahead of next week’s Federal Reserve meeting next week.