GBP/USD: Dollar vs. Pound Awaits Fed Chair Powell's Appearance Before Congress
  • Indian Rupee (INR) tracking domestic equities lower
  • India’s trade deficit widened
  • US Dollar (USD) rises despite disappointing US retail sales data
  • Federal Reserve to hike rates by 75 basis points

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Wednesday after two days of losses. The pair settled -0.12% lower on Tuesday at 77.99. At 16:00 UTC, USD/INR trades +0.12% at 78.09.

The Rupee tracked domestic shares lower, as the main indices were pulled down by energy and metal prices and as investors eyed the Federal Reserve monetary policy meeting later today.

The Nifty 50 closed 0.25% lower while the Sensex ended 0.3% lower.

The US central bank decision is in focus and comes after the Reserve Bank of India raised interest rates by 50 basis points last week.

In economic data, India’s trade deficit widened to $24.29 billion up from $6.53 billion a year earlier. Imports surged 62.83% annually to $63.22 billion, while exports rose 20.55% to $38.94 billion.

The US Dollar is across the board The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.03% at the time of writing at 105.33 marking its sixth straight day of gains.

The US dollar is on the rise ahead of the Federal Reserve interest rate meeting and despite weak data.

US retail sales unexpectedly fell in May for the first time in five months. Sales declined -0.3% month on month after a downwardly revised 0.7% rise in April. Delving deeper into the data it showed that auto purchases plunged and other big ticket items, raising concerns over consumer habits as inflation surged to a 40 year high.

The data suggests that US consumer demand is starting to soften, reflecting inflation rising to 8.6%.

Today the Federal Reserve will give its interest rate decision. The US central bank is expected to hike rates by 75 basis points. The Fed is also expected to downwardly revise the GDP outlook and lift inflation forecasts. Investors will be keen to see what the Fed is planning for later on in the year.