• Indian Rupee (INR) falls to a new record low
  • Could RBI hike by 50 basis points?
  • US Dollar (USD) rises to new 20-year high
  • Fed Chair Powell is due to speak

The US Dollar Indian Rupee (USD/INR) exchange rate is rising for the eighth straight session. The pair rose +0.12% yesterday, settling at 81.05, trading in a range between 81.28 to 81.78. At 10:00 UTC, USD/INR trades +0.18% at 81.85.

The Indian Rupee is once again trading under pressure alongside the soaring USD. The Reserve Bank of India is expected to have sold dollars to help shore up the Rupee as it lurches from one record low to another. It would appear that the RBI is trying to protect the 82 level.

The RBI could be prompted to deliver a 50-basis point rate hike on Thursday in an attempt to keep up with the Federal Reserve. The RBI has already hiked rates by 140 basis points since May to 5.4% to fight inflation, which rose over 7%.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.2% at the time of writing at 114.31, marking its 8th straight day of gains.

The US dollar hit a new 20-year high overnight as investors continued to price in a more hawkish Federal Reserve.

Stronger than forecast data yesterday boosted bets that the Fed would need to raise interest rates more rapidly to tackle elevated inflation.

US durable goods orders edged lower to -0.2% year on year but this was still better than the -0.4% forecast. Meanwhile, US consumer sentiment jumped higher in September, defying recession fears. Consumer confidence rose to 108, up from 103.5 in August despite inflation remaining elevated and the Fed hiking rates by 75 basis points just last week.

Today the USD continues to rise as attention turns to US pending home sales and a speech by US Federal Reserve chair Jerome Powell. The Fed Chair could shed more light on how aggressively the US central bank intends to hike rates over the coming meetings.