- Indian Rupee (INR) is rising, adding to gains last week
- Domestic equities fall for the fifth day
- US Dollar (USD) falls versus its major peers
- Fed could cut rates by 50 bps
The US Dollar Indian Rupee (USD/INR) exchange rate is falling, extending losses from last week. The pair fell 0.13% in the previous session, settling on Friday at 84.01. At 19:00 UTC, USD/INR trades -0.04% at 83.84 and is in a range of 83.83 to 83.92.
The Indian rupee rose against the US dollar on Monday, fueled by strong foreign institutional inflows into the Indian market and rising dovish Fed bets.
After a lackluster August, foreign institutional investors (FII) have made significant purchases of Indian equities so far in September, investing a total of $3.3 billion. While most of this investment has been directed toward secondary markets, around $614.23 million was invested in initial public offerings.
Still, the rise in the rupee could be limited amid soaring oil prices. Oil rallied 2% on Monday as the ongoing impact of Hurricane Francine on output in the Gulf of Mexico offset persistent concerns surrounding the Chinese demand outlook.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.44% at the time of writing at 100.67, extending losses from last week.
The US dollar is falling lower against its major peers, extending losses from last week as the market anticipated the Federal Reserve interest rate decision.
The market has ramped up expectations that the Federal Reserve will cut rates by an outsized 50 basis points rather than a 25-basis-point cut.
According to the CME Fed watch tool, markets are pricing in a 63% likelihood of a 50 basis point rate cut, up significantly from around 20% early last week.
Today, the economic calendar was relatively quiet, with just New York Empire State manufacturing data. This data rebounded strongly in September, rising to 11.9, up from -4.7. This was well ahead of expectations of -3.9.
Attention is now turning to the US retail sales data, which is due to be released tomorrow and is expected to show that sales rose 0.2% after rising 1% in the previous month.
