- Indian Rupee (INR) holds steady
- Domestic equities rise and oil falls over 3%
- US Dollar (USD) falls versus major peers
- Fed interest rate meeting on Wednesday
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Monday after booking gains across last week. The pair rose +0.14% in the previous week, settling on Friday at 83.26. At 18:00 UTC, USD/INR trades -0.0% at 83.26 and trades in a range of 83.23 to 83.41.
The Indian Rupee has failed to capitalize on the weaker US dollar and is holding steady after modest gains to domestic equities on Monday and despite oil prices falling.
India’s blue-chip index closed higher after a boost from heavyweight reliance, which posted a larger-than-expected profit last week. The nifty 50 closed 0.5% higher, while the Sensex rose 0.52%.
Reliance Industries has an almost 10% weighting in the Nifty 50, advanced over 2% after posting a 27.4% increase in consolidated profits in the second quarter.
Separately, oil prices fell, offering support to the Rupee given that India imports almost 80% of its oil needs. At the time of writing, West Texas intermediate trades 3.4% lower as fears ease of the Israel-Hamas conflict widening to include oil-rich nations ease.
The US Dollar is steady against the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.36% at the time of writing at 106.21, after booking gains across last week.
The U.S. dollar is falling lower ahead of the Federal Reserve interest rate decision on Wednesday and after strong gains across the previous week.
The U.S. dollar gained last week after a series of stronger-than-expected data, including US GDP, which smashed forecasts, and strong consumer spending, which has helped fuel bets that the Federal Reserve will keep interest rates high for longer.
Today, the US dollar is just easing in cautious trade ahead of the Fed meeting and as investors digest the latest Dallas manufacturing index, which unexpectedly deteriorated in October.
The Dallas Fed manufacturing index decreased to -19.2 in October down from 18.1 in September defying expectations of arrives to -15.
Given that manufacturing represents around 25% of the US economy, the data is unlikely to impact. the federal reserve’s decision on Wednesday. The Fed is not expected to hike interest rates but investors will be watching closely to see what they say about the future path for rate hikes.
