• Indian Rupee (INR) rises after gains last week
  • Domestic equities rise, and oil falls
  • US Dollar (USD) drops on less hawkish Fed expectations
  • Fed speaks are due later

The US Dollar Indian Rupee (USD/INR) exchange rate is falling at the start of the week, extending losses from the previous week.  The pair fell -0.36% in the previous week, settling on Friday at 81.96, trading in a range between 81.97 to 82.99. At 10:00 UTC, USD/INR trades -0.05% at 81.93.

The Rupee is starting the week on the front foot, capitalizing on a broadly weaker USD, and amid an upbeat risk tone across Asia.

Domestic equities pushed higher, up 0.4% at 61,185 for the Sensex. Meanwhile, the Nifty 50 is 0.47% higher at 18,202.

Oil prices fell lower in early trade after China reiterated its commitment to its zero-COVID policy, dashing hopes that it could consider a pivot away from the strict, economically damaging stance. Oil had reached an almost two-month high last week on hopes that China could ditch the zero-COVID approach.

The US Dollar is falling 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 110.48. The pair finished last week flat.

The USD fell steeply on Friday following the US non-farm payroll and continues to fall today. The labour market data was mixed with headline job creation beating forecasts at 261,000 in October and September’s reading was also upwardly revised to 315,000. However, unemployment rose more than expected to 3.7%, up from 3.5%, and wage inflation slowed.

Investors have homed in on the weaker side of the report, which supports the view that the Fed could slow the pace of rate hikes in the December FOMC meeting. The market is pricing in a 61% chance of a 50 basis point hike in December, which is up from 44% last week.

Looking ahead, there is no high-impacting US economic data due to be released. Instead, Fed speakers could influence the direction of the greenback.