• Indian Rupee (INR) prepares for a currency note exchange program
  • 2000 Rupee note is to be removed
  • US Dollar (USD) falls against major peers after a dovish Powell
  • US Fed speakers and debt talks are in focus

The US Dollar Indian Rupee (USD/INR) exchange rate is falling after eight straight days of gains. The pair rose +0.86% last week, settling on Friday at 82.87. At 10:30 UTC, USD/INR trades -0.02% at 82.86 and trades in a range of 82.73 to 82.90.

The Indian Rupee is rising as the country prepares for a second currency note exchange program in less than seven years. The 2000 rupee note will be removed from circulation in a move that comes ahead of a series of crucial state elections.

The move of the highest denomination note is not expected to be anywhere near as disruptive as a move in 2016 to demonetize 86% of the country’s currency in circulation overnight. Instead, the impact on the economy is expected to be marginal. The program will begin on Tuesday.

The US Dollar is falling across the board at the start of the week. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.12% at the time of writing at 103.08, after booking gains of 0.5% last week.

The US dollar is extending a sell-off which started on Friday after Federal Reserve chair Jerome Powell sounded more dovish than expected in a speech. Mr Powell said That interest rates may not need to rise by as much as initially expected in light of the banking sector turmoil. Powell expects tighter credit conditions to weigh on economic growth hiring, and inflation.

Looking ahead the US economic calendar is quiet on Monday However there are plenty of fed speakers on tap later in the session, including James Bullard, Thomas Barkin and Mary Daly.

Debt ceiling talks will also be in focus, after the Republicans walked out of negotiations on Friday. Talks between speaker Kevin McCarthy and US President Joe Biden are set to resume later today. Nerves are rising that there is still no agreement with the US sliding towards the X-date in early June when the US is expected to run out of money.