- Indian Rupee (INR) edges higher but falls across the week
- Oil prices rise 2%
- US Dollar (USD) falls versus major peers
- US consumer confidence data is due
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose +0.1% in the previous session, settling on Thursday at 83.26. At 10:30 UTC, USD/INR trades -0.02% at 83.24 and trades in a range of 83.21 to 83.27. The pair is set to rise across the week, marking a third week of gains.
The Indian Rupee is edging lower and is suspected to have been supported by the Reserve Bank of India, selling dollars to keep the Rupee off a record low.
Meanwhile, the Indian trade deficit came in at $19.37 billion in September this was slightly below the trade deficit of $23.25 billion that economists had been expecting.
Merchandise exports came in at $34.47 billion, whilst imports were $53.84 billion in September. This compares to exports of $34.48 million and imports of $58.64 billion in August.
Separately, oil prices could be capping the gains in the Rupee as West Texas Intermediate jumped around 2% on news that the US is tightening sanctions against Russia.
The US Dollar is holding steady versus the Rupee but rising versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.24% at the time of writing at 106.34, after strong gains yesterday. The USD is set to rise across the week.
The US dollar rose in the previous session after inflation data came back hotter than expected in September. U.S. consumer price index was 0.4% month on month, above the 0.3% forecast. On an annual basis, US inflation remained at 3.7%, defying expectations of a tick lower to 3.6%. Core inflation, which strips out more volatile items such as food and fuel, also rose by a stronger-than-forecast 0.3%.
The data highlights how a strong labour market is underpinning consumer demand, which keeps price pressures elevated and above the Federal Reserve’s 2% target level. The data supports the view that the Federal Reserve may raise interest rates again this year and keep interest rates high for longer in order to tame inflation.
Attention now turns to U.S. consumer confidence data, which is expected to tick lower to 67.2 in October, down from 68.1. Stronger than expected consumer sentiment often goes hand in hand with stronger consumer spending, raising inflationary pressures and supporting a more hawkish fed.
