- Indian Rupee (INR) rises as risk sentiment improves
- Oil prices remain elevated, equities rise
- US Dollar (USD) falls easing back from a 20-month high
- Fed set to hike rates next week
The US Dollar Indian Rupee (USD/INR) exchange rate trades lower on Tuesday snapping a four-day winning run. The pair settled +0.70% higher at 76.96 on Monday. At 11:30 UTC, USD/INR trades -0.03% at 76.93 after easing back from a record high of 77.44.
The Indian Rupee is on the rise as risk sentiment cautiously rebounds on Tuesday. Despite Russia continuing to attack Ukraine and oil prices rising further, the mood in the market has improved slightly, lifting riskier assets and currencies such as the Rupee.
investors are managing to look past rallying oil prices as the US weighs up a ban on Russian oil imports and Russia threatens to cut gas supplies to Europe. West Texas Intermediate trades 2% higher at $120.
Domestic equities are pushing cautiously higher after four straight days of declines. The Sensex trades +0.4% at 53,134 at the time of writing and the Nifty 50 has risen 0.4% to 15,994.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.16% at the time of writing at 99.13, after four straight days of gains.
The US dollar rose in the previous session boosted by safe have trade, pushing over 99.00 for the first time since May 2020.
Today, however, the greenback is edging slightly lower as investors take stocks of developments. Surging oil and commodity prices across the globe are raining fears of slowing growth and rising inflation, a phenomenon called stagflation.
Stagflation could prevent the Federal Reserve from acting as aggressively as has initially been expected to tame rising inflation.
The next Federal Reserve meeting is next week, with the Fed broadly expected to hike interest rates by 25 basis points, lower than the 50 basis points which had also been on the cards before Russia invaded Ukraine.
There is no high-impacting US data due to be released today. Sentiment is expected to continue driving trade.
