• Indian Rupee (INR) drops to a record low
  • Oil has risen to a 5-month high
  • US Dollar (USD) falls versus major peers
  • Fed Chair Powell says more evidence of cooling inflation

The US Dollar Indian Rupee (USD/INR) exchange rate is rising after being unchanged yesterday. The pair was flat at 0.01% in the previous session, settling on Tuesday at 83.35. At 18:00 UTC, USD/INR trades +0.17% at 83.48 and trades in a range of 83.34 to 83.61.

The Rupee came under pressure at a record low, dragged lower by dollar demand from local oil companies and amid weakness in its Asian peers.

Most Asian currencies fell on Wednesday following an earthquake in Taiwan and as oil prices rose to a 5-month high. Oil has risen over the past few months amid geopolitical tensions and concerns over supply.

The Reserve Bank of India said that strong economic growth and moderating inflation means that the central bank will have more room to keep rates on hold potentially until July. The RBI is widely expected to leave rates on hold on Friday for a seventh straight meeting.

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 0.49% at the time of writing at 104.29, extending losses for a second day.

The US dollar is falling lower after investors digested mixed data and comments from Federal Reserve Chair Jerome Powell.

On the data front, ADP payrolls came in ahead of expectations, with 184,000 jobs added in the private sector in March, up from 140,000 in February and ahead of 148,000 that economists had anticipated. The data paints a picture of a solid labour market ahead of Friday’s non-farm payroll report.

Meanwhile, US ISM services PMI was slightly weaker than expected, ticking lower to 51.4, defying expectations of a rise to 52.7.

Meanwhile, Federal Reserve Chair Jerome Powell said that Federal Reserve officials still expect to cut interest rates this year. However, policymakers want to see further evidence of inflation cooling towards the 2% target. However, he added that recent data hasn’t materially changed the Federal Reserve’s outlook of the economy, of solid growth and cooling inflation.

Looking ahead, there is no further data due to be released today. Attention will turn to tomorrow when several more  Federal Reserve officials are due to speak and could shed more light on the timing of the Fed’s next move.