• Indian Rupee (INR) rises as risk appetite rebounds
  • Indian equities jump 3%
  • US Dollar (USD) eases on safe haven outflows
  • US PPI expected to fall

The US Dollar Indian Rupee (USD/INR) exchange rate is moving lower on Tuesday snapping a seven-day winning run. The pair settled +0.45 higher on Monday at 75.65. At 11:30 UTC, USD/INR trades -0.45% at 75.31.

The Indian Rupee is rising as risk sentiment improves. Reports that some Russian troops are withdrawing from the Ukraine border, back to their bases is boosting hopes that the Russia-Ukraine conflict is de-escalating.

Optimism that was in eastern Europe could be avoided is lifting risk appetite. Riskier assets across the board are rising, including Indian equities. The Sensex and the Nifty 50 both closed 3% higher, recouping losses from the previous session.

Oil prices are also easing lower as the Russia -Ukraine conflict de-escalates. After hitting a 7 year high at the start of the week, oil prices trade down 3%.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.32% at the time of writing at 96.06 after 3 straight days of gains.

The US gained in the previous session as fears of a Russia-Ukraine war saw investors dump riskier assets such as stocks and move into safe haven’s such as the US Dollar.

The greenback was also supported by comments from St Louis Federal Reserve President James Bullard who doubled down on his desires for a 100-basis points interest rate rise by July, in order to tame inflation.

Today, the mood in the market is improving and safe haven outflows are weighing on the value of the US Dollar.

Attention is also turning towards US wholesale inflation data, which is expected to show that inflation eased slightly in January to 9.1%, down from 9.8%. A slowdown inflation at the factory level could indicate that inflation is starting to slow. Weak inflation could drag on demand for the USD.