- Indian Rupee (INR) is rising for a second day
- Rupee appears supported by RBI intervention
- US Dollar (USD) holds steady versus major peers
- US treasury yields near 5%
The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a second straight day. The pair closed -0.23% lower in the previous session, settling on Thursday at 83.09. At 11:30 UTC, USD/INR trades -0.05% at 83.10 and trades in a range of 83.02 to 83.19. The pair is expected to fall across the week.
The Rupee is strengthening for a second straight day after logging one of its biggest one-day advances in three weeks against the US dollar on Thursday. It would appear that the currency had a helping hand from central bank intervention, as analysts suspect that the Reserve Bank of India intervened in the spot and non-undeliverable forward markets.
The Reserve Bank of India may have intervened multiple times this week to prevent the Rupee from hitting its record low.
Separately, oil prices are pushing higher, with West Texas intermediate trading up 1.4% at 89 60 at the time of writing.
The US Dollar is falling against the Rupee but holds steady against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.0% at the time of writing at 106.25, after two days of gains.
The US dollar is holding steady against its major peers on the week’s final session after booking losses yesterday following Federal Reserve chair Jerome Powell’s comments.
The Federal Reserve Chair said that the US economy strengthened and a tight labour market could mean that higher interest rates are needed in order to control inflation. However, in an acknowledgment of elevated treasury yields, he also said that the bond market is doing some of the central banks’ work, helping tighten financial conditions.
During his comments, the yield on the 10-year treasury yield fell lower, and the US dollar fell eased as well.
However, overnight, the US treasury yield rose to 5%, a level not seen since 2007, after a string of better-than-expected U.S. economic data this week and on expectations that the Fed could keep interest rates high for longer.
The market is not expecting the Federal Reserve to raise interest rates in the November meeting, with the CME Fed watch tool is pricing in a 94% probability of the Fed leaving rates unchanged.
