- Indian Rupee (INR) falls on sanction doubts
- Oil rises as Russia sanctions hit
- US Dollar (USD) rises ahead of a busy day
- US ISM non-manufacturing PMI, Fed Powell to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday, paring losses from the previous session. The pair settled -0.19% lower yesterday at 75.61. At 10:30 UTC, USD/INR trades -0.01% at 75.74.
The Rupee trades under pressure amid growing concerns that the US is considering sanctions against India and as oil prices climb.
US diplomat Donald Lu said yesterday that the US is considering applying sanctions to India to purchase the S-400 Triumf missile defense system from Russia. He added that India could be concerned over its defense deals with Russia, which are now likely to be impacted by sanctions.
Oil prices are surging higher as Western sanctions raise fears over oil supply concerns. Stoking those fears further, OPCE+ decided to stick to its current plan of small, gradual increases to production of just 400,000 barrels per day. West Texas Intermediate trades at $113 up 23% so far this week, whilst Brent hit $118, which is bad news for oil-importing countries such as India,
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.24% at the time of writing at 97.62 after ending flat yesterday.
The US dollar failed to gain ground yesterday despite upbeat ADP data. The ADP private payrolls report showed that 475,000 private payrolls were added in February, well above the 378,000 forecast, and January’s count was upwardly revised to 509,000, from -301,000.
However, in his testimony before Congress, Fed Chair Powell, as good as ruled out a 50-basis point interest rate hike, instead indicating that the US central bank will hike rates by 25 basis points. This is expected to be the first of many hikes across the year to bring 40-year high inflation back under control.
Today attention will stay on Fed Powell, who will testify before Congress again. The US economic calendar is also busy with US Challenger job cuts, ISM non-manufacturing data, and US jobless claims.