indian-rupee-bank-notes - INR
  • Indian Rupee (INR) falls extending last week’s losses
  • Indian GDP slows
  • US Dollar (USD) rises in risk off trade
  • US ISM manufacturing data due tomorrow

The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher on Monday, building on gains from last week.  The pair gained +0.52% last week, settling on Friday at 75.06. At 15:30 UTC, USD/INR trades +0.59% at 75.50.

The Indian Rupee is heading lower in risk off trade as investors digest the latest Russia, Ukraine headline and the latest domestic data.

India’s economy lost momentum in the final quarter of 2021, as growth slowed compared to the previous two quarter. Indian GDP rose 5.4% year on year in the October to December quarter. This was less than the 6% forecast by Reuters analysts and was also well below the 8.5% recorded in the previous quarter and 20.2% in the quarter before that.

Slowing growth comes at a time when sanctions being imposed on Russia, the world’s 11th largest economy threaten to slow global growth.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.1% at the time of writing at 96.72 adding to gains of 0.6% last week.

The US Dollar is rising on safe haven flows. As the West imposed harsh sanctions on Russia, preventing it from accessing international financial markers and freezing the Russian Central Bank’s access to foreign reserves.

The moves came as Russia continued to attack Ukraine and also put its nuclear arms on standby, in an escalation of tensions.

Companies across the globe are starting to enforce the sanctions imposed. These were mainly aimed at the banking sector. Banks with exposure to Russia are those that are coming under the most pressure.

Looking ahead there is no high impacting US data due today so sentiment is likely to continue drive the US dollar ahead of ISM manufacturing data tomorrow.