- Indian Rupee (INR) falls for a third day
- Oil prices rise to a 10-month high
- US Dollar (USD) rises for a fifth straight session
- US ISM services PMI beats forecasts
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a third straight day. The pair rose +0.23% in the previous session, settling on Tuesday at 83.03. At 17:30 UTC, USD/INR trades +0.23% at 83.23 and trades in a range of 82.97 to 83.24.
The Rupee trades under pressure amid a risk-off mood in the market. Concerns over the health of the Chinese economy have weighed on sentiment in recent days after weak Chinese services data earlier in the week.
However, concerns over weakness in China may not be all bad news. Investors are looking for an alternative to investing in China are turning their attention instead to India.
Oil prices have risen to a 10-month high in recent sessions, boosted by Saudi Arabia and Russia extended oil output cuts. The combined total of cuts is 1.3 million barrels a day, which will be extended until December.
While higher oil prices are an inflationary concern in the US, potentially sending the USD northwards, higher oil prices are a drag on the Indian economy, an economy that imports over 80% of its oil needs.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.04% at the time of writing at 104.85, rising for a fifth straight session.
The USD is rising after stronger-than-expected data fueled bets that the Federal Reserve could raise interest rates again by the end of the year.
US ISM services PMI unexpectedly rose in August to 54.5 up from 52.7 in July and ahead of the 52.5 forecast. The index remaining above 50 indicates growth in the dominant service sector, which could be considered inflationary.
The data comes as Fed speakers are in focus. Yesterday Christopher Waller said that he didn’t see a September rate hike coming. However he would leave the door open for another hike later in the year.