• Indian Rupee (INR) falls despite rising domestic equities
  • Oil prices are set to fall 4.5% this week
  • US Dollar (USD) falls versus major peers
  • US housing data is in focus

The US Dollar Indian Rupee (USD/INR) exchange rate is rising after losses in the previous session. The pair fell -0.06% in yesterday, settling on Thursday at 83.14. At 12:00 UTC, USD/INR trades +0.15% at 83.26 and trades in a range of 83.14 to 83.28.

The Indian Rupee is edging higher, tracking domestic equities northward, with the Nifty 50 and the Sensex rising. Both indices are set to log their third straight weekly gain lifted by technology stocks amid an improving global interest rate outlook.

The Nifty 50 is on track to book gains of 1.58% this week, marking it best monthly performance in two months, while the Sensex rose 1.37%.

Also supporting the Rupee has been a sharp decline in oil prices. WTI has fallen 4.5% this week, extending losses of 4.15% from the previous week. Falling oil prices are good news for India which imports around 80% of its oil needs.

The US Dollar is rising 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 -0.15% at the time of writing at 104.19 and is set to book a weekly loss.

The US dollar is set to book steep losses across the week after a series of weaker-than-expected data has fueled investors’ expectations that the Federal Reserve will not raise interest rates further.

Yesterday, US jobless claims rose by more than expected with initial claims, so the number of Americans applying for unemployment benefits for the first time rose by 231,000 up from 218,000 in the previous week and well ahead of the 220,000 that economists had pencilled in.

Meanwhile, continuous claims rose for an eighth week to 1865k from 1833k, well above the 1845k. that was anticipated. This data suggests that the US labor market is starting to weaken in line with an economy that is slowing after an aggressive rater hiking cycle from the Federal Reserve.

Looking ahead, attention is on U.S. housing starts which could provide further insight into the health of the US economy. Weakness in the housing market can lead to a deterioration in consumer confidence.

The market no longer expects the Federal Reserve to raise interest rates in December and is more focused on when the central bank could start cutting interest rates.