- Indian Rupee (INR) tracking domestic equities lower
- Rupee is set for a small weekly gain
- US Dollar (USD) rises after steep falls yesterday
- Federal Chair Powell to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Friday paring losses from the previous session. The pair settled -0.2% lower on Thursday at 77.94. At 11:00 UTC, USD/INR trades +0.15% at 78.06. The pair is set to lose -0.07% across the week.
The Rupee is set to gain across the week despite Indian equities suffering the worst weekly declines since May 2020. Domestic equities were hit by worries of inflation and aggressive tightening from central banks prompting a recession.
The Nifty 50 and the Sensex both trade a yearly low. Although the Reserve Bank of India has tried to calm concerns by saying that they are not behind the curve on inflation and a soft landing for the economy is still possible.
Meanwhile, oil prices have also supported the Rupee this week. Oil is trading lower across the week, for the first time in five weeks as recession fears hurt the demand outlook.
The US Dollar is across the board The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.53% at the time of writing at 104.33 after steep losses yesterday. The USD is set to rise modestly across the week in its third straight week of gains.
The USD fell steeply yesterday despite the Federal Reserve hiking interest rates by 75 basis points earlier in the week and despite rising expectations of another 75 basis point hike in the July meeting. Instead, the USD fell, probably after the Swiss National Bank unexpectedly raised interest rates by 50 basis points. The CHF competes with the USD for safe-haven flows. The hiking of interest rates from the traditionally dovish bank boosted the appeal of the Franc, drawing flows from the USD.
Today the USD is rising, rebounding from yesterday’s losses, as treasury yields rise again. Attention now turns to Federal Reserve Chair Powell who is due to speak.