- Indian Rupee (INR) shows resilience ahead of LIC IPO
- Domestic equities finish higher
- US Dollar (USD) rises for a sixth straight day
- US GDP -1.4%
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday after two days of losses. The pair settled +0.25% lower on Wednesday at 76.47. At 15:00 UTC, USD/INR trades +0.24% at 76.64.
The Rupee traded lower versus the stronger USD. However, it continued to show resilience against the greenback. Losses in the Rupee are being limited by currency inflows ahead of the nation’s largest IPO next week.
The state-owned insurance behemoth Life Insurance Corporation of India will launch its initial public offering (IPO) ON May 4th and the issue will close on May 9th.
The company will sell its shares in the range of Rs902-949 per share equity. Policyholders, retail investors and employees will be offered a discount.
The IPO appears to be drawing inflows, protecting the Rupee from expectations of a more hawkish Federal Reserve. However, this is a temporary phenomenon after which fundamentals will continue to drive the market.
The Sensex closed 1.2% higher, as did the Nifty 50.
Separately oil prices held steady for a second day as Russian supply concerns were offset by a weaker demand outlook as China’s COVID picture deteriorates.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.7% at the time of writing at 103.68, marking its sixth straight day of gains.
The US dollar trades around at 5 year high, as investors shrug off disappointing economic growth data.
Data revealed that the US economy contracted for the first time since 2020 in the first three months of the year. The Q1 GDP fell -1.4% annualized down significantly from 6.9% in Q4 2021.
Whilst a contraction in the economy and rising inflation will raise fears of stagflation, the US dollar is not reflecting that today, instead bounding higher along with stocks.
Meanwhile, initial jobless claims remained well below 200k, at 179.7k, up slightly from 177.5k last week.