- Indian Rupee (INR) rises after two days of losses
- Oil prices fall on demand outlook concerns
- US Dollar (USD) rises versus its major peers
- US jobless claims rise by more than expected
The US Dollar Indian Rupee (USD/INR) exchange rate is falling, snapping a two-day winning streak. The pair rose 0.02% in the previous session, settling on Wednesday at 83.65. At 17:00 UTC, USD/INR trades -0.06% at 83.59 and trades in a range of 83.49 to 83.66.
The Indian rupee recovered some ground on Thursday after dropping to a record low on Wednesday, weighed down by concerns of higher rates for longer in the US, which affects emerging market currencies.
Meanwhile, oil prices continued to fall, which supported the Rupee. Oil prices fell 3% yesterday and extended those losses today amid a weakening demand outlook and as the risk premium on oil eased as the market is more comfortable that Israel won’t retaliate against Iran for the weekend attack. Falling oil prices is a benefit for the Indian economy, which imports 80% of its energy needs.
Separately, domestic equities in India moved lower due to caution ahead of the earning season and the start of the Indian elections.
The US Dollar is falling against the Rupee but gains against major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.12% at the time of writing at 106.08 after losses yesterday.
The U.S. dollar is holding steady after easing away from its five-month highs as the recent rally pauses for breath.
The U.S. dollar has moved firmly higher this year as the markets pushed back on Federal Reserve rate cut expectations.
After higher-than-expected inflation and signs of a robust economy, Federal Reserve chair Jerome Powell said that there could be a delay in cutting interest rates as the central bank struggles to make progress in cooling inflation.
Today, US jobless claims came in stronger than expected, rising 212k in line with the previous week and below forecasts of 2.15K, pointing to continued labor market strength.
The strength and resilience of the labour market, which is driving the economy and keeping inflation elevated, mean that the Fed could struggle to cut interest rates this year.
