- Indian Rupee (INR) falls in risk-off trade
- Domestic equities fall
- US Dollar (USD) is rising after more hawkish Fed speak
- US PMI data is due
The US Dollar Indian Rupee (USD/INR) exchange rate is rising, paring some losses from the previous session. The pair fell -0.18% yesterday, settling at 82.12. At 10:00 UTC, USD/INR trades +0.04% at 82.15 and trades in a range of 82.10 to 82.29. The pair is on track to rise 0.4% across the week.
The Rupee is falling amid a souring market mood, which is hurting demand for riskier assets and currencies such as the Rupee, while the USD is pushing higher.
The Sensex trades 0.3% lower on Friday and is set to book a loss across the week. Meanwhile, oil prices are also falling amid fears of a recession in the US hurting the demand outlook. Oil is set to fall 6% across the week.
The US Dollar is rising 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 101.87, recouping losses from yesterday. The USD is set to rise 0.5% this week after five straight weeks of declines.
The US dollar is pushing higher after more hawkish rhetoric overnight. Cleveland Federal Reserve president Loretta Mester said that she sees the interest rate rising over 5% and staying then for some time in order to tame inflation. Other fed officials have recently voiced similar opinions about the need for further rate hikes.
The comments come amid signs of the US economy is starting to slow. Regional manufacturing data has shown a slow down and US jobless claims rose by more than expected to 245,000, up from 240,000, amid signs of weakness seeping into the US labour market which has been remarkably resilient.
Attention now turns towards US PMI data which is expected to show that the service sector grew at a slightly slower pace 51.6 in April, down from 52.6. Meanwhile, the manufacturing sector is contracting as a slightly faster pace of 49, down from 49.2.