• Indian Rupee (INR) falls as fears over Russia war intensify
  • Indian equities fall for a fifth straight session
  • US Dollar (USD) falls versus major peers
  • US PMIs due

The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher after two straight days of declines. The pair settled -0.23% lower on Wednesday at 74.49. At 11:30 UTC, USD/INR trades +0.40% at 75.79.

The Rupee is tracing domestic equities lower., Indian shares fall for a fifth straight session as Russia Ukraine tensions mount.

The Nifty 50 fell as much as 2% earlier in the day, pushing below the 200-day moving average, a key support, before pick up off session lows. The Nifty 50 closed 0.7% lower.

The risk off mood came as Russian President Putin ordered troops into parts of Ukraine, which are occupied by separatists; areas which Putin recognized as independent from Ukraine yesterday.

The move has sparked widespread condemnation from the West, with the promise of widespread sanctions to come.

The US Dollar is rising versus the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.15% at the time of writing at 95.93 adding to mild gains from the previous session.

Whilst the US dollar started today’s session on the front foot it has quickly given up gains. Interestingly, the initial flow into safe havens has slowed or reversed, with the likes of gold actually falling lower.

Whilst eastern European tensions will continue to dominate trade, attention will also turn to US business activity data which is due be released and will provide some insight into the recovery from Omicron.

The main focus will be on the service sector, the sector which has, in the past, been more adversely affected by covid restrictions.

The service sector PMI is expected to rise to 53, where the figure 50 separates expansion from contraction. However, it is worth noting that both in Europe and the UK the service sector PMIs have come in firmly above forecasts. A strong reading could boost the USD.