indian-rupee-bank-notes - INR
  • Indian Rupee (INR) rises as risk sentiment improves
  • All eyes are on Ukraine
  • US Dollar (USD) falls despite strong data
  • US PCE inflation & personal spending rise

The US Dollar Indian Rupee (USD/INR) exchange rate is lower on Friday, snapping a four day winning run. The pair settled +1.30 higher on at 75.07. At 11:30 UTC, USD/INR trades +0.39% at 75.60. The pair is on track to gain 0.6% this week.

The Rupee advanced on Friday after falling across most of the week. Demand for riskier assets and currencies rose again on Friday as risk sentiment improved as investors continued to monitor geopolitical developments.

The Kremlin announced that it was prepared to send a delegation to Minsk, which has boosted optimism surrounding a diplomatic solution, which could halt the fighting in Ukraine. Even so, there has been more fighting in Ukraine as Russian forces make their way to Kiev.

Any sense that the situation is improving could help the Rupee rebound. Meanwhile, any deterioration of the conflict could push the Rupee lower.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.45% at the time of writing at 96.7 adding to mild gains from the previous session. The US dollar is on track to gain 0.7% across the week after losing 0.4% in the previous week.

The US Dollar was falling lower despite upbeat data. The Fed’s preferred inflation measure rose higher than forecast in January, jumping to 5.2% year on year in January. The was the highest level in 39 years and above the 4.9% level forecast.

However high inflation didn’t stop consumers from spending. Personal spending also rose faster than what analyst had been expecting, up 2.1% year on year in January, ahead of the 1.5% forecast and up from a -0.8% decline in December.

This was the final PCE reading ahead of the March Fed meeting, a meeting where the Fed will decide whether the hike rates by 25 or 50 basis points.