- Indian Rupee (INR) falls after China’s trade surplus drops
- Oil prices offer support
- US Dollar (USD) rises after strong US ISM services data
- Federal Reserve speaks are due
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Wednesday for a fifth straight session. The pair rose 0.11% yesterday settling at 79.87 after trading in a range of 79.73 to 79.91. At 11:00 UTC, USD/INR trades +0.2%2 at 79.88.
The Rupee is falling, tracking domestic equities lower in risk-off trade. Data from China revealed that the Chinese trade balance was much weaker than expected, raising concerns over growth in the world’s second-largest economy and India’s key trade partner.
The Sensex trades 0.3% lower, and the Nifty 50 trades -0.18%.
Oil prices are bringing some support to the Rupee. Oil fell 2.3% yesterday as demand worries rise. West Texas Intermediate trades below $90 the barrel and briefly fell to a new 8-month low.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.20% at the time of writing at 110.42, building on strong gains from the previous session.
The USD rallied in the previous session after strong than expected US ISM services PMI data. The data showed that the sector, which is the biggest contributor to the US economy, unexpectedly grew at a faster rate in August. Rising new orders, improving supply chains and cooling price pressures painted an improved picture of the US economy.
The ISM services PMI rose to 56.9, up from 56.7 and ahead of forecasts of 55.5. The strong data promoted bets that the Fed could hike rates more aggressively, boosting the USD.
Today the USD continues to rise, the USD index hit a new 20-year high. There is no high impacting US data due today. There are several Federal Reserve officials who are due to speak and could help provide clues as to whether the Fed will hike rates by 50 or 75 basis points later this month.
