• Indian Rupee (INR) falls as oil prices rise
  • Oil rises to a 3-month high
  • US Dollar (USD) edges lower after strong gains
  • US jobless claims next CPI data is due on Friday

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday adding to gains in the previous session. The pair settled +0.10% higher on Wednesday at 77.72. At 12:00 UTC, USD/INR trades +0.01% at 77.73, after rising as much as 78.02 earlier in the day.

The Indian Rupee dropped to a record low versus the US dollar today amid the continual surge in oil prices, which are raising concerns over imported inflation. Domestic equities are also moving lower.

West Texas Intermediate rose to a fresh 3 month high of $123 per barrel as the market continues to experience tight supply and as demand from both China and the US ramps up. Strong trade data from China also helped lift oil prices.

High oil prices are a big worry for India which imports 80% of its oil requirements.

The US Dollar is rising versus the Rupee but falling versus major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.11% at the time of writing at 102.40 after strong gains in the previous session.

The US dollar rose yesterday on safe-haven flows after the OECD, like the World Bank earlier in the week, slashed global growth forecasts. The OECD now expects growth of 3%, down from 4.5% which is what was forecast in December last year.

Attention is now turning to the US jobless claims report due later today. Analysts are expecting the number of Americans signing up for unemployment benefits for the first time to rise by 10,000 to 210,000. So far the US jobs market has remained strong despite signs of weakness in other areas of the economy. Investors will be watching for any signs that the labour market is softening.

The real focus this week is on U inflation data tomorrow. This will be the key focus as to whether the US has passed peak inflation. Expectations are for a slight down to 8.2% annually from 8.3%