- Indian Rupee (INR) has fallen 6% this year
- RBI to spend more to defend the Rupee
- US Dollar (USD) rises as the market mood sours
- Friday sees PMI data released
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Wednesday recouping losses from the previous session. The pair settled 0.25% lower on Tuesday at 7785. At 12:00 UTC, USD/INR trades +0.18% at 80.01.
The Rupee continues to trade around record lows against the greenback despite the Reserve Bank India defending the Rupee. The central bank said that it was prepared to sell a sixth of its foreign exchange reserves in order to defend the Rupee.
The steps and measures to defend the Rupee come as India’s foreign exchange reserves have fallen by over $40 billion across the past 9 months. This year so far the Rupee has fallen 6% against the USD as inflation surges and amid portfolio outflows.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.26% at the time of writing at 107.00 after losses in the previous session.
The US dollar fell yesterday as investors continued to ease back on aggressive Federal Reserve bets, pulling the greenback lower. The Federal Reserve are in the blackout period ahead of the Federal Reserve Monetary policy meeting at the end of July.
The economic calendar has also been quiet so far this week. Data yesterday showed that housing starts fell to the lowest level in 9 months as rising mortgages dampen demand.
Today the market mood has turned cautious. Stock indices across the board have turned lower as investors continue digesting US earnings and as the market looks ahead to key risk events tomorrow. Both the European Central Bank and the Bank of Japan are due to announce their interest rate decisions.
Looking ahead there is no high impacting data until Friday when PMI data will shed light on how the US economy is holding up as inflation surges.