- Indian Rupee (INR) is flat after gains last week
- India 5th phase of the elections kicks off
- US Dollar (USD) rises versus its major peers
- Fed speakers are in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady after losses last week. The pair fell 0.29% in the previous week, settling on Friday at 83.30. At 17:00 UTC, USD/INR trades -0.01% at 83.29 and trades in a range of 83.23 to 83.31.
The Indian Rupee is holding steady as Indians voted today for the fifth phase of the huge general election, which takes place in Mumbai, the financial hub.
The world’s largest election, which began on April 19th, comes amid days of excess heat. Votes will be counted on June 4th, with Prime Minister Narendra Modi expected to win a third straight term.
Almost 1 billion people are eligible to vote in India’s election; however, the earlier phases were plagued by poor turnout, with an average turnout of 66.95%, which has increased to 69% in the fourth phase on May 13th.
The US Dollar is holding steady against the Rupee but rising against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.07% at the time of writing at 104.57 after losses last week.
The US dollar is heading higher after losing ground last week as investors react to the latest Federal Reserve commentary.
The U.S. dollar fell 0.8% last week after cooler-than-expected US inflation data raised expectations that the Federal Reserve could start cutting interest rates this year.
However, Federal Reserve policymakers have been cautious in their commentary, warning that interest rates may need to stay high for longer to cool inflation back towards the 2% target.
Vice Fed chair for supervision Michael Barr said that the Federal Reserve is in a good position to hold policy steady and watch the economy. Fed vice chair on the Board of Governors, Philip Jefferson, acknowledged that April’s inflation reading was encouraging. Still, he also said it was too early to tell if the recent slowing in the disinflationary process would be long-lasting.
Looking ahead, the economic calendar is relatively quiet. The focus will be on the FOMC minutes released on Wednesday.
