- Indian Rupee (INR) rises as risk appetite rises
- Oil prices fall & equities rise
- US Dollar (USD) falls as other central banks up hawkish rhetoric
- Fed speaker Waller up next
The US Dollar Indian Rupee (USD/INR) exchange rate is falling on Friday, after booking small gains yesterday. The pair rose +0.05% yesterday, settling at 79.66 after trading in a range of 79.63 to 7983. At 11:00 UTC, USD/INR trades -0.2 at 79.50. The pair is set to fall 0.25% across the week.
The Rupee has risen to a more than one-week high as it tracks domestic equities higher and capitalises on the weaker US dollar.
Indian shares have risen to a 3-week high, boosted by financial and metal companies. The Nifty 50 trades 0.5% higher, and the Sensex has risen 0.46%. Both indices are set to gain around 2% across the week.
Meanwhile, weaker oil prices are also offering relief to the currency, given that India imports around 80% of its oil needs. Oil prices have fallen around 18% since the beginning of August amid concerns over the demand outlook.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -1% at the time of writing at 108.41, extending losses from the previous session.
The US dollar is falling sharply as investors reassess global rate hike expectations. While Federal Reserve Chair Jerome Powell reaffirmed the US central bank’s commitment to addressing high inflation, other central banks across the globe, particularly the ECB have also ramped up their fight against inflation. Expectations of a 75 basis point rate hike at the coming September FOMC meeting rose.
The USD is also tracking treasury yields lower. With oil prices down a further 3% across the week and down 10% across the past two weeks, there is growing optimism that inflation in the US will continue to cool. US consumer price index for August will be released next week. CPI in July eased to 8.5%.
There is no high impacting US economic data today. Attention turns to Federal Reserve official Waller who is due to speak.