• Indian Rupee (INR) rises for a 3rd day
  • RBI highlighted concerns over El Nino
  • US Dollar (USD) rises against major peers on safe-haven flows
  • FOMC minutes are due later

The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a third straight day. The pair fell -0.01% in the previous session, settling on Tuesday at 82.83. At 10:30 UTC, USD/INR trades -0.18% at 82.64 and trades in a range of 82.63 to 82.98.

The repeat is extending gains despite the risk-off mood in the broader market. The Sensex trades 0.3% lower at the time of writing, and US futures are also pointing to a weaker start.

Meanwhile, the governor of the Reserve Bank of India noted that India’s inflation had cooled, but he highlighted concerns over weather-related uncertainties which he said still posed a headwind.

He said the war on inflation is not over and that they will see how El Nino factors play out, referring to the weather system.

His comments come as India’s annual retail inflation cools to 4.7% in April, down from 5.66% in the previous month.

The US Dollar is falling against the Rupee but rising against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.18% at the time of writing at 103.72, after booking gains of 0.3% in the previous session.

The US dollar is pushing higher safe haven flows as investors worry over the lack of progress in U.S. debt ceiling talk, which has stalled as the US continues to slide towards the early June x- date.

The X- date, which U S Treasury Secretary Janet Yellen says is the beginning of June, IS when the US will run out of money and could potentially default on its debt obligations.

Looking ahead, investors will be watching the release of the minutes from the latest Federal Reserve interest rate meeting. At the meeting, the US central bank raised interest rates by 25 basis points and hinted that they could pause rate hikes in the June meeting.

Investors will be scrutinising the minutes for clues Ava the feds feature path for interest rate decisions. The release comes as the market is pricing in an 70% probability that the Fed will pause rate hike.