• Indian Rupee (INR) falls for a second day
  • Wholesale inflation cools to 10.4%
  • US Dollar (USD) rises after retail sales slip
  • Consumer confidence improves

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Friday for a second straight day. The pair fell +0.02% yesterday, settling at 82.17, trading in a range between 82.10 to 82.68. At 17:00 UTC, USD/INR trades +0.1% at 82.30. The pair is set to fall 0.6% across the week.

India’s wholesale price inflation cooled slightly in September to 10.7% year on year. This was down from 12.4% the previous month and was below the 11.5% forecast.

Separately consumer spending appears to be strong as the festival period continues. Online and offline sales are expected to be north of $27 billion, almost double the same period in 2019. The surge appears to be down to pent-up demand as well as due to rising wages and a stronger jobs market.

Meanwhile, domestic equities ended the day higher, the Sensex closed up 1.2% at 57,919.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.57% at the time of writing at 113.17, paring losses from yesterday. The USD is set to rise 0.3% across the week, its second straight week of gains.

The US dollar is rallying higher in risk-off trade, reflected in a steep selloff in the equity markets. The S&P500 trades almost 2% lower. This appears to be a delayed reaction from yesterday’s hotter-than-forecast inflation print. The reaction yesterday appeared illogical, with the USD falling and stocks rising.

Today US retail sales were worse than expected. The data showed that sales stalled at 0% month on month in September, down from 0.4% in August. The weaker sales indicate that the US consumer, who has been incredibly resilient across the year is starting to feel the impact of rising prices.

In addition to retail sales, consumer confidence rose by more than expected to 59.8, up from 58.6 and ahead of forecasts of 59.