- Indian Rupee (INR) slips, extending losses
- Indian stocks pausing after 11-day rally
- US Dollar (USD) falls versus major peers
- FOMC rate decision is the key event this week
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a fifth straight day and extending gains from last week. The pair rose +0.08% last week, settling on Friday at 83.06. At 10:30 UTC, USD/INR trades +0.16 at 83.20 and trades in a range of 83.08 to 83.23.
The rupee is falling further against the US dollar, tracking the Indian stock market lower.
India’s benchmark stock indices fell on Monday after a record-setting rally as investors digested developments in China and looked ahead to the FOMC rate decision.
Both the Sensex and the Nifty 50 were trading 0.1% lower at the time of writing, snapping an 11-day winning run.
While China data last week was upbeat, raising optimism that Asia’s largest economy could be turning a corner, concerns over the key property sector remain as Evergrande tumbles 25%. Indian tech stocks are also falling.
The US Dollar is rising against the Rupee but falling against major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.04% at the time of writing at 105.30, after booking gains across the previous week.
The US dollar rose last week for a ninth straight week after hotter-than-expected US inflation data.
Recent data from the US has shown that the economy is holding up better than initially expected, with service sector and jobs data remaining resilient,
As the new week kicks off, attention is firmly on the Federal Reserve’s interest rate decision, which will be announced on Wednesday. The market is currently fully pricing in a pause in the rate hiking cycle from the Federal Reserve.
However, policymakers are expected to maintain the hawkish stance signalling the possibility of at least one more hike this year. That said, the market is not as convinced that the Fed will raise rates again this year, pricing in just a 30% probability of a rate hike in November.