- Indian Rupee (INR) falls tracking equities lower
- Domestic equities fell for a 6th straight session
- US Dollar (USD) rises after strong GDP data
- Core PCE data due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a second straight session. The pair rose +0.19% in the previous session, settling on Wednesday at 83.17. At 18:00 UTC, USD/INR trades +0.12% at 83.17 and trades in a range of 83.13 to 83.32.
The Indian rupee lost ground on Thursday as it tracked domestic equities lower and despite oil prices also falling.
Indian stocks fell for a sixth session in risk-off trade as investors fretted over elevated US treasury yields and fears over the Middle East conflict broadening.
The benchmark indices, the Nifty 50 and the Sensex, have both lost almost 5% across the past six sessions, pushing the Nifty into oversold territory for the first time in almost a year and a half. All 13 sectorial indices fell with banks and IT dropping over 1.3%, respectively.
Meanwhile, oil prices fell over 1.7% pairing yesterday’s gains on optimism that Israel will hold off from a ground invasion. Concerns of slow economic growth, particularly in the eurozone area, is also weighing on oil prices.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.33% at the time of writing at 106.88, extending gains for a third straight session.
The U.S. dollar is rising for a third straight day after the US economy grew by more than expected in the third quarter, highlighting the ongoing strength of US economy.
US GDP came in at 4.9% annualized with the government, households, and home builders supporting growth. This was up from 2.3% in the second quarter and was well ahead of the 4.3% growth forecast.
Household spending grew by 4%, durable goods increasing and notably strong at 7.6% growth. However, interestingly, the core PCE figure is more than expected at 2.4%, down from 3.7% in the previous quarter.
Attention will remain on inflation heading into Friday, with the monthly core PCE figure expected to ease to 3.7% year on year in September, down from 3.9%. Hotter-than-expected inflation could fuel bets that the Federal Reserve will look to raise interest rates again before the end of the year.
That said, the Fed will meet next week and are expected to leave interest rates on the whole at 5.25% to 5.5%.
