• Indian Rupee (INR) rises for a fourth day
  • Domestic equities fall from a 9-month high
  • US Dollar (USD) rises versus majors
  • Midterm election results coming in

The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a fourth straight session.  The pair fell -0.53% yesterday, settling on Tuesday at 81.37, trading in a range between 81.24 to 82.03. At 16:00 UTC, USD/INR trades -0.07% at 81.31.

The Rupee has had a strong start to the week, thanks in part to USD weakness and owing to equity inflows.

Foreign equity inflows into Indian shares have rebounded. Foreign investors have brought $2 billion worth of Indian equities so far this month.

After a strong run higher, Indian equities are easing lower today, pulling off the nine-month highs reached earlier in the day. The Nifty 50 closed 0.25% lower, and the Sensex also fell 0.25% after two straight days of gains.

The US Dollar is falling versus the Rupee but is rising against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.6% at the time of writing at 110.25, snapping a three-day losing streak.

The USD is rising for the first time this week as investors digest the latest developments in the midterm elections as the results keep coming through and as attention turns to tomorrow’s inflation data.

The Republicans look set to flip the Houses of Representatives, with 199 seats at the time of writing against the Democrats 174. The Senate is still too close to call.

Attention is now moving towards the second risk event this week, the US inflation data. Inflation, as measured by the consumer price index, is expected to cool slightly to 8% year on year in October, down from 8.2% in September. Meanwhile, core inflation, which has been rising still, is expected to show signs of peaking at 6.5% annually, down from 6.6%. A hot inflation print could raise expectations of a more aggressive Federal Reserve and lift the USD higher.