- Indian Rupee (INR) rises from a fresh record low
- RBI intervened to lift the currency
- US Dollar (USD) falls across the board despite strong retail sales data
- Fed Powell to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is falling on Tuesday snapping a 4-day winning run. The pair settled +0.44% higher on Monday at 77.81. At 14:00 UTC, USD/INR trades -0.38% at 77.51
The Indian Rupee has risen off record lows after the Reserve Bank of Indian intervened, helping the down beaten currency to regain some lost ground.
The Reserve Bank of India revealed that they hade made a similar move in March, selling net $20.1 billion in the spot foreign exchange market to prop up the Rupee against the USD. In March the Rupee hit its first record low of the year, breaking below 76.90 per dollar.
Since then the Rupee has been reaching multiple record lows owing to the broad strength in the USD and strong risk aversion in the market.
The US Dollar is falling 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 103.47, extending yesterday’s selloff.
The US dollar fell yesterday, tracing US treasury yields lower, as investors started to question the Fed’s ability to hike rates aggressively following weaker than expected New York manufacturing data.
Today the USD continues to fall as the market mood improves and investors sell out of the safe haven in search of riskier assets.
Not even strong US retail sales have been able to boost the buck. US retail sales rose 0.9% month on month in April, even though consumer confidence had fallen to an 11 year low and despite inflation hovering around a 40 year high. The data should give the Fed confidence to raise interest rates.
Attention now turns to US Federal Reserve Chair Jerome Powell who is due to speak later today. Investors will be watching for clues over the next moves by the Fed.
