- Indian Rupee (INR) falls on Russia- Ukraine invasion fears
- Indian WPI rises 12.96% YoY
- US Dollar (USD) rises on safe haven flows & hawkish Fed bets
- No US data due
The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher on Friday for a ninth straight day. The pair gained 0.94% across last week, settling on Friday at 75.34. At 11:30 UTC, USD/INR trades +0.31% at 75.57.
The India Rupee is falling lower in risk off trade. Concerns that Russia could invade Ukraine in the coming days has sparked a risk off move across the financial markets. Riskier assets and currencies such as the Rupee are being sold off in favour of safe havens such as the US Dollar and the Japanese yen.
Separately, India’s wholesale inflation price index remained in double digits for a 10th straight month. Wholesale prices rose 12.96% in January compared to a year earlier, less than 13.56% recorded in December, but more than the 12.70% that analyst had been forecasting.
Higher food prices were a main driver of inflation. Food price inflation rose 9.55% year on year, up from 9.24% in December. Rising input costs such as fuel and metals have also contributed to higher prices.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.42% at the time of writing at 96.35 adding to gains from last week.
The US dollar rose last week after inflation reached 7.5% and bets ramped up that the US Federal Reserve would raise interest rates by 0.5% in March. The Fed could then go on to raise interest rates up to 6 times across this year in order to tame runaway inflation.
In addition to expectations of a more hawkish Fed, the US dollar is also rising on safe haven flows as Russia- Ukraine tensions rise. Russia has 130,000 troops on the Ukraine border but insists it is not going to invade. US intelligence suggests that they will invade this week.
