- Indian Rupee (INR) eases tracing domestic equities lower
- Oil prices rise after EU sanctions
- US Dollar (USD) rises for a fifth straight day
- US FOMC minutes are due to be released
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Wednesday for a second straight session. The pair settled +0.02% lower on Tuesday at 75.44. At 12:00 UTC, USD/INR trades +0.43% at 75.77.
The Indian Rupee trades lower, tracing domestic equities southwards. Both Indian equities and the Rupee are out of favour amid rising concerns over a more hawkish Fed as inflation surges higher.
Indian shares fell for a second straight session on Wednesday, dragged lower by heavyweight financials.
The Nifty 50 closed 0.8% lower, and the Sensex dropped 59610.
The Reserve Bank of India started its three-day monetary policy meeting day. Expectations are for the RBI to delay its first rate hike for a further four months, until August at the earliest.
Separately oil prices are rising after registering small losses yesterday. Oil prices fell after the EU decided not to apply sanctions to Russian oil and gas but did apply restrictions to Russian coal.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.05% at the time of writing at 99.52, marking its fifth straight day of gains.
The US dollar jumped higher yesterday after robust US service sector data and after more hawkish sounding Fed officials. The ISM service sector PMI showed that the dominant sector in the US saw strong growth in March of 58.3, up from 56.6 in February. The headline number was firm, but orders also strengthened in addition to employment.
Adding to the upbeat mood surrounding the US dollar, Fed speakers sounded more hawkish. Fed Governor Leal Brainard hinted at a more aggressive Fed with a rapid balance sheet reduction and rate hikes above 25 basis points.
Attention will now turn to the release of the minutes from the March Fed meeting. This was the meeting when the Fed raised interest rates for the first time since 2018. Investors will be looking closely for clues over the timing of the balance sheet runoff.