indian-rupee-bank-notes - INR
  • Indian Rupee (INR) falls as risk off trade continues
  • Oil prices rise
  • US Dollar (USD) rises as Russia, Ukraine tensions remains
  • Fed meeting begins

The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher on Tuesday, adding to gains in the previous session. The pair settled +0.31 higher on Monday at 74.61. At 11:30 UTC, USD/INR trades +0.23% at 74.79.

The Rupee is edging lower as risk off trade is set to continue in the US. Concerns over Russia invading Ukraine escalated higher yesterday as diplomatic staff were pulled out of Kiev. Fears are growing that war could break out soon as Russia puts 100,000 troops on the boarders. Theses concerns in addition to fears of a more hawkish Fed are driving traders out of riskier asses and currencies such as the Rupee.

Rising crude oil prices are adding to the Rupees woes. West Texas Intermediate trades +1.1% higher.

The US Dollar is rising 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 96.25 adding to gains yesterday.

The US Dollar advanced yesterday on safe haven flows amid fear that Russia could invade Ukraine imminently. Investors shrugged off disappointing US business activity data, as the Markit Services and Composite PMIs fell to their lowest level since 2020, much worse than analysts’ forecasts.

The US Dollar is extending yesterday’s gains as investors continue to look for safe havens, whilst selling out of riskier assets such as US stocks. The US futures market trades firmly lower ahead of the open.

Attention is now turning towards the Federal Reserve two-day monetary policy meeting which kicks off today. With inflation at a 40 year high the Fed are expected to adopt a more hawkish stance, which is lifting the US Dollar.

US consumer confidence data will also be in focus later and is expected to show that morale ticked lower in January as Omicron cases surged.