- Indian Rupee (INR) is rising & gains across the week
- Domestic post strongest weekly performance in 3 months
- US Dollar (USD) falls versus its major peers
- US losses could be limited
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose 0.02% in the previous session, settling on Thursday at 83.24. At 19:00 UTC, USD/INR trades +0.21% at 83.06 and trades in a range of 83.03 to 83.38. The pair is on track to fall 0.29% across the week.
The Indian Rupee is capitalizing on the weaker USD and the upbeat market mood. Thanks to strength in the financials and metals sector, domestic equities have recorded their strongest weekly gain in almost three months.
The Nifty 50 and the Sensex gained 2.2% and 2.02% respectively. Heavyweight financials rose 1.7% this week, posting a second straight week of gains. The gain in equity markets came as foreign investors reined in bearish bets on equities ahead of the June 4 election results and owing to the Reserve Bank of India’s record dividend to the Indian government.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.37% at the time of writing at 104.67, snapping a five-day losing streak.
The US dollar is falling, snapping a five-day winning run, but it is still on track to book gains of 0.2% across the week.
The USD was boosted earlier in the week by stronger-than-expected data, hawkish minutes from the latest Federal Reserve meeting, and a string of comments from Fed officials warning the rate needs to stay high for longer.
Yesterday’s data shows that US business activity expanded at the fastest pace in almost two years in May, boosted by strength within the service sector. The prices paid sub-components of the services PMI also moved higher, raising concerns over sticky inflation, which could hamper the Fed’s ability to cut rates.
Today, the USD is giving back gains in profit-taking, but the outlook for the USD remains strong.
