• Indian Rupee (INR) falls as Russia conflict worsens
  • Oil prices hit 14 year high
  • US Dollar (USD) rises on safe-haven demand & after strong jobs data
  • Fed set to hike rates next week

The US Dollar Indian Rupee (USD/INR) exchange rate trades higher on Monday for a fourth straight session. The pair settled +0.61% higher at 76.41 on Friday. At 11:30 UTC, USD/INR trades +0.72% at 76.98. The pair gained 1.8% across the previous week.

The Rupee fell to a record low overnight but has eased slightly higher, with risk sentiment taking another hit as the West considers imposing sanctions On Russian oil.

Oil prices jumped to $130 overnight on the news as investors digested the prospect of a severe supply shock. According to analysts at ANZ, around 5 million barrels of oil per day could be affected.

Fears of surging inflationary pressures are also hurting riskier currencies and assets across the globe. This is bad news for India, which imports oil, but it is also bad news for the global markets, sparking fears of stagflation. According to JP Morgan, oil prices could surge to $185 per barrel.

The blue-chip Nifty 50 fell 1.9%, and the Sensex trades down 2.1% amid fears that the Reserve Bank of India will be forced to hike interest rates to cope with surging inflation as oil prices soar.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.3% at the time of writing at 99.00, adding to last week’s gains of 2.1%

The US dollar charged higher at the end of last week following impressive US jobs market data. The US non-farm payroll revealed that 678,000 jobs were added in the US in February, well ahead of the 400,000 forecasts. The unemployment level ticked lower to 3.8%, down from 4%, signifying that the labor market recovery is going well.

The data comes as the Fed prepares to hike interest rates next week for the first time since the pandemic’s start.