- Indian Rupee (INR) shows resilience
- Indian housing sector is expected to remain strong
- US Dollar (USD) holds yesterday’s losses
- US Fed Chair Powell is due to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Tuesday after booking gains in the previous session. The pair settled +0.17% higher on Monday at 81.81. At 10:00 UTC, USD/INR trades 0.01% at 82.82 and trades in a range of 81.74 to 81.85.
Data from India showed that the housing market remained strong despite interest rates rising and an uncertain global economic outlook. The housing sector is a major source of employment for India and is expected to remain a stable contributor to economic activity in Asia’s third-largest economy.
Average house prices are expected to rise 5.5% this year and 5% in 2024. outpacing inflation projections of 5.1% and 4.5%, respectively.
Separately oil prices are holding steady around a 3-week high above $80.00 as investors weigh up China demand uncertainties and supply worries.
The US Dollar is holding steady across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.0% at the time of writing at 104.30 after booking losses yesterday.
The us.net is holding steady on Tuesday as investors look cautiously ahead to an appearance by Federal Reserve chair Jerome Powell in a semi-annual testimony before Congress.
Lawmakers will likely challenge Powell over the Federal Reserve’s policy of hiking interest rates sharply to tame multi-decade high inflation and the US economy’s ability to withstand the rate hikes without tipping the economy into recession.
The market will be looking for clues from Fed Chair Powell over how high-interest rates could rise and the potential size of the next rate hike in March. The markets currently price in a 30% probability of the Fed raising interest rates by 50 basis points in March. Just a month ago, the market had been pricing in just a 25 basis point hike.
A hawkish sounding Powell could lift the USD. However should Powell focus on the disinflation narrative, the USD could slip lower.