inr-bank-notes - INR
  • Indian Rupee (INR) falls in risk-off trade
  • Domestic equities book worst quarter since Q1 2020
  • US Dollar (USD) rises after hawkish Fed comments
  • PCE falls for the third month

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday, paring losses from the previous session. The pair settled -0.06% lower on Wednesday at 78.92. At 15:00 UTC, USD/INR trades +0.17% at 79.05.

The Indian Rupee trades lower as risk sentiment tumbles. The market mood has deteriorated significantly, dragging risker assets such as the Rupee lower.

Domestic equities are also trading under pressure owing to the souring market mood.  Indian shares closed the day lower while booking their worst quarter since the start of the pandemic in 2020. Fears of aggressive central bank rate hiking to tame surging inflation and slowing economic growth are driving the risk-off mood.

Oil prices are easing lower as recession fears build. Slower economic output hurts the demand outlook for oil.  Oil is now set to fall across the week marking its third week of declines.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.11% at the time of writing at 105.18 after strong gains yesterday. The USD is set to rise modestly across the week in its third straight week of gains.

The US Dollar is rising on safe-haven flows. Those same fears hurting demand for riskier assets are boosting demand for the US dollar.

Yesterday Federal Reserve Chair Jerome Powell voiced his commitment to taming inflation, even if that meant that the US economy slowed too much and slipped into recession. Jerome Powell insisted that inflation was the larger risk.

The hawkish comments drove the US dollar higher, turning into support from safe-haven flows.

On the data front, personal consumption and expenditure fell for a third straight month, a sign that inflation could be easing. However, personal spending also slowed, which is unnerving investors.

Initial jobless claims steadied at 231k, just down marginally from 233k in the previous week.