- Indian Rupee (INR) tracking domestic equities lower
- Inflation fears & rising oil prices hit the Rupee
- US Dollar (USD) steadies after strong gains
- Federal Chair Powell to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Wednesday after a three-day winning run. The pair settled 0.7% higher on Tuesday at 78.97. At 11:00 UTC, USD/INR trades -0.01% at 78.96.
The Rupee fell to a record low in early trade, tracing domestic equities lower as inflation fears resurface. The Nifty 50 fell -0.5% and the Sensex also dropped 0.5%
The Rupee has fallen firmly across the past few sessions as oil prices have jumped higher. West Texas Intermediate trades over 7% higher so far this week on the back of tightening supply concerns.
The G7 leaders discussed plans to place more sanctions on Moscow targeting oil prices, a move that raised concerns over supply. Furthermore, political trouble in Libya is hitting output.
OPEC+ starts a 2-day meeting today to discuss the output levels for August. The group is expected to stick to the 648,000 additional barrels per day agreed in the previous meeting.
The US Dollar is treading water across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.01% at the time of writing at 104.51 after strong gains yesterday.
The USD rose firmly yesterday despite disappointing US consumer sentiment data. The Conference Board’s consumer confidence index fell to a 16-month low in June as rising prices and recession concerns dampened the outlook for Americans.
Consumer confidence fell to 98.7 down from 106.6 in May and well below the 100.4 forecast. The data reinforces the University of Michigan’s consumer confidence last week, which dropped to a record low.
Today the USD ios holding steady as investors await fresh clues from Federal Reserve Chair Powell who is due to speak at the ECB form in Portugal. Any hawkish comments from the Fed chair could lift the USD.
Prior to Powell’s speech attention will be on US GDP data, which is expected to confirm te earlier readings of -1.5% annually in the first quarter.