• Indian Rupee (INR) shows resilience
  • Domestic equities fall
  • US Dollar (USD) rises for a sixth straight day
  • US jobless claims fall to 166k

The US Dollar Indian Rupee (USD/INR) exchange rate edged lower on Thursday after two days of gains. The pair settled +0.67% lower on Wednesday at 75.94. At 19:00 UTC, USD/INR trades -0.02% at 75.93.

The Rupee was holding up well on Thursday despite the fall in domestic equities. Indian equities came under pressure as risk sentiment faltered on hawkish Federal Reserve expectations.

The Nifty 50 fell 0.9% to 17,639 and the Sensex fell 0.97% to 59,034.

Attention is now turning to the Reserve Bank of India, which has started the three-day monetary policy meeting as inflation accelerates particularly in food.

Despite rising price pressures, the RBI is not expected to raise interest rates for another four months.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.1% at the time of writing at 99.74, marking its sixth straight day of gains.

The US dollar is pushing higher supported by expectations of a more hawkish Federal Reserve. The minutes to the March Federal Reserve monetary policy meeting showed that policymakers were broadly in agreement that interest rates could be hiked by at 50 basis points on one if not more occasion and that there should be a rapid trimming down of the balance sheet.

A 50 basis point rate hike is now 80% priced into the market and helped boost the US Dollar index to a 23 month high.

The meeting minutes were as hawkish as investors expected. Federal Reserve policymakers have been sounding increasingly more hawkish over the past few weeks.

US jobless claims data was strong, with initial claims falling to 166,000, this was the lowest level that it has been in over 50 years.

There is no high-impacting US data due to be released today.