• Indian Rupee (INR) rises despite a risk-off mood
  • Stocks gain and oil falls
  • US Dollar (USD) falls after weak data fuels recession fears
  • US housing data and jobless claims are due

The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a second straight session. The pair settled -0.2% lower on Wednesday at 81.44. At 11:00 UTC, USD/INR trades -0.10% at 81.36 and trades in a range of 81.20 – 81.44.

The Indian Rupee is capitalizing on a weaker USD, advancing despite weak risk sentiment across the financial markets.

Domestic equities are falling after two straight days of gains, as fears of a US recession and over hawkish Fed chatter weigh on risk sentiment.

At the time of writing, the Nifty 50 trades -0.4% at 18,097 and the Sensex trades -0.3% at 60,883. All sectors are under pressure, but metal stocks were among the biggest fallers. While metal stocks have benefited in recent sessions from optimism surrounding the reopening of China, today some profit-taking is taking place.

Falling oil prices are offering some support. West Texas Intermediate has fallen 1% on recession fears and after industry stockpile data revealed that inventories unexpectedly jumped. Indian imports over 80% of its oil requirements.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.2% at the time of writing at 102.16 after modest losses yesterday.

The US dollar trades under pressure as recession fears rise. US retail sales and industrial production fuelled worries over growth, sending the USD dollar lower. Meanwhile, the S&P500 fell the most in over a month.

Retail sales dropped by 1.1% month on month in December, marking the largest decline in over a year. November retail sales but also revised lower.

Despite the weak data, Federal Reserve officials sounded hawkish, which, combined with slower consumer spending, unnerved the market.

Looking ahead, attention will be on US housing starts and building permits which could shed more light on the health of the housing market. US initial jobless claims are expected to rise slightly to 214,000, up from 205,000.