- Indian Rupee (INR) hold steady for another day
- Equity-related inflows could support the Rupee
- US Dollar (USD) falls versus major peers
- US consumer confidence data due
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady. The pair fell -0.01% in the previous session, settling on Monday at 83.33. At 12:00 UTC, USD/INR trades +0.01% at 83.33 and trades in a range of 83.31 to 83.42.
The Rupee is holding steady despite its Asian peers strengthening on Tuesday, as hovers in a tight range in the last week of November.
The Rupee is supported in part by equity-related inflows, which have seen Indian domestic equities rise to a two-month hurt high. Meanwhile, the MSCI increasing India’s weighting in its emerging market India index from November 30th is set to drive inflows in the region of $1.5 billion.
Exporter dollar sales may offer some support to the Rupee heading towards the end of the month.
Meanwhile, investors will be watching oil prices closely ahead of Thursday’s OPEC+ meeting and US inflation data.
The US Dollar is holding steady across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.01% at the time of writing at 103.18, after three days of losses.
The US dollar is holding steady as it languishes near a three-month low on bets that the Federal Reserve will not raise interest rate any further. Instead, the market is increasingly convinced that when the Fed does move again, it will be to cut interest rates.
Attention is turning to U.S. consumer confidence data, which is due out later today and is expected to show that consumer confidence declined again in November which would mark a fourth straight monthly deterioration in consumer sentiment.
Falling consumer sentiment often goes hand in hand with lower spending, which would suggest that households are coming under pressure as the Federal Reserve keeps interest rates at a 22-year high of 5.25 to 5.5% to fight inflation.
Inflation in the US is currently at 3.2% year on year in October after falling by more than expected. Attention is turning to US core PCE data, which is due out tomorrow and is the Fed’s preferred measure for inflation.
Another cooling inflation print could add to bets that the Federal Reserve may start to cut interest rates in the second quarter of next year.