- Indian Rupee (INR) lower for a third straight day
- FPI jumps in November
- US Dollar (USD) holds yesterday’s gains versus major peers
- Aggressive Fed bets are building
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a third straight day on Tuesday. The pair rose +06% yesterday, settling at 81.89. Today, at 16:30, USD/INR trades +0.68% at 82.44, trading in a range between 81.90 to 82.64.
The rupee is falling in its worst trading fashion in more than two months on corporate dollar outflows. The rupee has weakened over 1.6% across the last two trading days. The sudden decline in the rupee caught some traders off guard end comes despite some upbeat data.
Foreign portfolio investors bought Indian stock worth 4.4 billion U.S. dollars in November, marking the second-best month for overseas inflows into Indian equities this year. The jump in inflows comes as Indian shares rise to record highs. The Nifty 50 and the Sensex rose 4.1% and 3.87%, respectively, last month.
The US Dollar is rising versus the Rupee but falling against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.09% at the time of writing at 105.15, after booking strong gains in the previous session.
After a strong rebound yesterday, the US dollar broadly held onto Monday’s gains amid a quiet economic calendar. Investors continued to digest recent data which has raised questions over whether the Federal Reserve will be able to slow the pace of rate hikes.
Yesterday US ISM services PMI data showed that activity in the US service sector grew at a faster pace than expected in November. The ISM services PMI raise 56.6 up from 54.4. This was ahead of forecasts of 55.5.
The survey was hot on the heels from Friday’s nonfarm payroll report, which showed that US economy continued to create jobs at a fast pace in November with wage growth also accelerating. The U.S. economy is showing a level of resilience which suggests that the US Federal Reserve may struggle to slow the pace of rate hikes, supporting the USD.
