- Indian Rupee (INR) is rising after a flat day yesterday
- Large foreign banks were selling US dollars
- US Dollar (USD) rises versus its major peers
- FOMC minutes had a hawkish tilt
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after a flat finish yesterday. The pair was unchanged at 0% in the previous session, settling on Tuesday at 83.31. At 19:00 UTC, USD/INR trades -0.09% at 83.25 and trades in a range of 83.22 to 83.38.
The Indian rupee is gaining, reaching a monthly high as it finds some support from dollar sales from large foreign banks, with at least two making sales on behalf of custodial clients.
The Rupee is tracking domestic equities higher with tech stocks leading the charge as well as heavyweight Reliance Industries supporting gains. Both the Nifty 50 and the Sensex closed 0.3% higher,.
The US Dollar is falling against the Rupee but is rising against its 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 104.78, snapping a three-day losing streak.
The U.S. dollar is rising against its major peers as investors digest hawkish commentary from recent Fed speakers, and the minutes from the May Federal Reserve interest rate meeting have supported the view that interest rates may need to stay high for longer in order to bring inflation back towards the 2% target.
Federal Reserve governor Christopher Waller said that he would need to see several more good inflation prints before he would consider cutting interest rates. Cleveland Fed president Loretta Mester conveyed a similar message.
Meanwhile, the minutes from the May Fed interest rate decision also had a hawkish tilt, showing that some officials were worried that financial conditions were not sufficiently restrictive. The main message is the policymakers see slow progress on cooling inflation, saying it’s taking longer than anticipated to reach the 2% target.
Again, these minutes support the view that the Fed will keep interest rates high for longer and dampen expectations that the Fed will start cutting interest rates as soon as the September meeting.
