inr-bank-notes - INR
  • Indian Rupee (INR) falls despite gains in equities
  • Sensex & Nifty 50 rise 1.4%
  • US Dollar (USD) falls versus majors as Fed bets ease
  • Fed blackout period begins

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Monday adding to gains from the previous session. The pair gained 0.6% across last week settling on Friday at 79.76 after trading in a range of 79.22 to 80.23 a new all-time high. At 11:00 UTC, USD/INR trades +0.23% at 79.97.

The Indian Rupee is trading under pressure despite an upbeat market mood and rising domestic equities.

Indian stocks have pushed higher, boosted by metal stocks and tech. The Sensex trades 1.4% higher and the Nifty 50 also gained 1.4%.

Separately the Reserve Bank of India spike encouragingly of the Indian economy, saying that it had shown resilience in the face of global headwinds.  It is on track to becoming the world’s fastest-growing economy and inflation could start easing.

Supply chain pressures appear to be peaking and commodity prices falling, which should help inflation slow.

The US Dollar is rising against the Rupee but is falling against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +-0.45% at the time of writing at 107.38 after rising 1% across the last week.

The US dollar soared last week after US inflation data came in hotter than expected, hitting a fresh 40 year high  in June. Wholesale inflation also rose by more than expected. The market started pricing in a 100 basis point rate hike this month.

However, since then Fed speakers have calmed the market saying that a 75 basis point hike was more likely.

The easing Fed bets have helped soothe the market bringing the USD off recent highs. Looking ahead the Fed has entered the blackout period ahead of the meeting so there will be no more clues from Fed speakers. There is no high impacting US data due today. Looking out across the week, the US calendar is relatively quiet until Friday’s PMI’s.