- Indian Rupee (INR) drops to 80.12 before the RBI intervened
- Domestic equities fell sharply
- US Dollar (USD) holds steady after reaching a 20-year high
- Fed vice president Brainard to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower on Monday after ending last week more or less flat. The pair settled +0.05% higher last week settling at 79.96. At 11:00 UTC, USD/INR trades -0.05% at 79.90.
The Indian Rupee fell to a record low on Monday as hawkish Fed bets ramped up. The local currency dropped to a low of 80.12 before edging higher after the Reserve Bank of India sold dollars to lift the Rupee.
There are doubts over whether the RBI will continue to intervene so frequently given the weakening underlying tone for the Rupee given broad-based USD strength.
Indian equities fell in line with other benchmarks across Asis. The Sensex closed 1.46% lower at 57,972. The Nifty 50 closed 1.4% lower at 17,312.
Oil prices are also rising on expectations that OPEC+ could cut oil output to stabilize the price. Oil trades over $93.00.
The US Dollar is trading lower versus the Rupee but is holding steady against its major peers. The US dollar index, which measures the greenback versus a basket of major currencies, trades +0.0% at the time of writing at 108.79 after strong gains across the previous week.
The US dollar pushed higher, reaching a 20 year peak on Monday as investors continued digesting Federal Reserve Chair Jerome Powell’s pledge to keep hiking rates to fight inflation.
At the Jackson Hole Symposium ON Friday, Powell said that the Fed would hike rates and then keep interest rates elevated to stamp out inflation. His comments pour cold water over any optimism that the US central bank could be looking towards a dovish pivot.
High interest rates will slow economic growth and weaken the jobs market over the coming months.
There is no high impacting US economic data today. Attention will be on a speech by Federal Reserve vice president Brainard who is due to speak later today.