• Indian Rupee (INR) falls but is set to be flat across this week
  • Domestic equities jump higher and oil falls
  • US Dollar (USD) rises after strong GDP data yesterday
  • US core PCE inflation due later

The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Friday, extending gains from the previous session. The pair rose +0.58% yesterday, settling at 82.36, trading in a range between 82.01 to 82.57. At 10:00 UTC, USD/INR trades +0.12% at 82.46. The pair is set to trade roughly flat across the week.

The Rupee is falling despite domestic equities pushing modestly higher. The Sensex trades +0.08% at the time of writing at 59, 808 and the Nifty 50 trades +0.13 at 17,760.

However, the Rupee has shown resilience across the week, supported by hopes that the Fed could be looking to slow the pace of rate hikes from December

Oil prices are falling, which could help limit the losses in the Rupee. West Texas Intermediate trades 1% lower at the time of writing at $88.00.  Oil is still set to rise 3.5% across the week.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.38% at the time of writing at 110.99 after booking gains of 0.8% in the previous session. The USD is set to fall 1% across the week, the second straight week of declines.

The US dollar rose yesterday after stronger-than-expected US economic growth in the third quarter. US GDP came in at 2.6% annualized in the July to September period. Analysts had been expecting to see a rebound of 2.4%, after two straight quarters of contraction. The data pulls the US economy out of a technical recession.

Today the focus is firmly on US core PCE data, which is the Federal Reserve’s favoured gauge for measuring inflation. Expectations are for core PCE to rise 5.2% year on year in September, up from 4.9% in August. Hot inflation is not expected to change expectations of a 0.75% rate hike next week. However, it could alter market expectations for December’s FOMC meeting.