- Indian Rupee (INR) falls as the market mood sours
- Oil extends losses, limiting losses on the Rupee
- US Dollar (USD) rises after two days of decline
- Housing data is due later
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Wednesday for a second straight session. The pair rose 0.15% yesterday, settling at 82.30, trading in a range between 82.00 to 82.16. At 10:00 UTC, USD/INR trades +0.1% at 82.39.
The Indian Rupee is falling in risk-off trade. The souring market sentiment is hurting demand for riskier assets and currencies such as the Rupee.
Softer oil prices are helping to limit losses in the Rupee, given India’s heavy dependence on oil imports. Oil has fallen around 6% since Friday, dropping almost 4% yesterday on the news that the US was considering releasing oil from US strategic Petroleum Reserves (SPR).
West Texas Intermediate now trades at a two-week low below $83.00, falling over $10 per barrel from its recent high after OPEC+ cut output.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.3% at the time of writing at 112.48 after two days of losses.
The USD dollar experienced a two-day correction, falling lower as investors focused on upbeat earnings. Stronger than expected Q3 numbers from the US banks and Netflix had distracted investors from inflation worries, hawkish Fed concerns, and recession fears.
The correction was short-lived, which is not that surprising given that the Federal Reserve remains very hawkish, with no sign of a dovish pivot. The US central bank is expected to raise interest rates by 75 basis points in November, and the probability of another 75-basis point hike in December has risen to 70% up from 32% just 1 week ago.
Attention will remain on earnings. US housing data will also be in focus after building permits dropped -8.5% in September and could continue falling. The data comes after the NAHB housing index dropped to 38 in October, its tenth straight month of declines.