• Indian Rupee (INR) is falling for a third day
  • Record temperatures hit north & western India
  • US Dollar (USD) rises to a weekly high
  • US regional Fed survey showed an improving picture

The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a third straight day. The pair rose 0.07% in the previous session, settling on Tuesday at 83.16. At 19:00 UTC, USD/INR trades +0.17% at 83.37 and trades in a range of 83.14 to 83.40.

The Indian rupee is struggling against a stronger U.S. dollar as temperatures in India reach a record high of 52.9°C.

The heat wave, which has been in place in large parts of India since last week, has recorded record heat levels in the north and western parts of India.

Extreme weather conditions could prevent some businesses from carrying out operations as normal.

Elsewhere, the Rupee found no support from news that the IMF upwardly revised China’s GDP after a strong first quarter. The IMF forecasts 5% growth in 2024, an upgrade from the previously expected 4.6%.

However, the good news came with expectations of slower growth in the years ahead. The IMF said that China would slow to growth of 3.3% by 2029 due to an aging population and slower expansion in productivity.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.4% at the time of writing at 105.03, marking a second day of gains.

The US dollar extended gains today, reaching new highs for the week against its major peers following some of the regional Federal Bank surveys showing an improving picture.

The Richmond Fed manufacturing index rose back to zero in May from -7 in April, ahead of estimates of a rise to -2. Meanwhile, the Richmond Fed services index improved to 3 from -13 previously.

The Dallas Fed Services index fell further into negative territory at -12.1, following a – 10.6 reading in May.

The data follows yesterday’s stronger-than-expected U.S. consumer confidence and as Federal Reserve officials continue hawkish calls.

Yesterday, Minneapolis Fed President Neel Kashkari warned that policymakers would still consider raising interest rates if needed to tame inflation.

His comments come ahead of Friday’s core PCE, which is the work the Federal Reserve’s preferred inflation gauge.