• Indian Rupee (INR) falls in risk-off trade
  • Chinese exports drop to a two-year low
  • US Dollar (USD) rises to a 20-year high
  • US Fed speakers

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Monday, building on gains from the previous week. The pair gained  +0.5% last week, settling on Friday at 76.94. At 10:00 UTC, USD/INR trades +0.67% at 77.47 as all-time high.

The Rupee is tracing domestic equities lower in risk off-trade. Indian shares have fallen over 1%, and the Rupee is firmly out of favor as lockdown restrictions in China and hawkish central banks raise concerns over global growth.

The Nifty trades down 1%, and the Sensex trades -1.1% lower, falling for the fourth straight session. Last week the Reserve Bank of India surprised the market with an interest rate rise.

Lockdown restrictions in Shanghai have been tightened, and the impact of the zero-COVID policy is being reflected in Chinee data. Exports from China dropped as factories and ports closed but also as foreign demand weakened. Exports grew just 3.9% year on year in April, the lowest level in almost two years and after rising 14.7% in March.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.33% at the time of writing at 104.02, adding to gains from the previous week.

The US Dollar has soared to a 20-year high in early trade, lifted by investors seeking safe-haven properties amid concerns over global growth.

In addition to safe-haven flows, the USD benefits from the hawkish Federal Reserve. Last week the Fed raised interest rates by 0.5% and planned for several more outsized hikes across the year. This week’s attention will be firmly on US inflation data which could show that consumer prices continued to rise in April above March’s 8.5%, a 40-year high.

Today there is no high impacting US data. However, plenty of Fed speakers are due to speak who will almost certainly continue the hawkish chorus.