- Indian Rupee (INR) falls to a record low
- Russian geopolitical tensions fuel risk-off trade
- US Dollar (USD) holds steady after losses yesterday
- The US economic calendar is quiet
The US Dollar Indian Rupee (USD/INR) exchange rate is inching lower on Tuesday for a third straight day. The pair fell 0.03% in the previous session, settling on Monday at 84.39. On Tuesday at 17:300 UTC, USD/INR trades down 0.02% at 84.38 and traded in a range of 84.38 to 84.47.
The Rupee declined to an all-time low, pressured by demand from foreign banks and importers, although the Reserve Bank of India likely helped stem losses.
Asian currencies were broadly under pressure as investors searched for safe-haven assets amid rising geopolitical tensions.
Russian President Vladimir Putin lowered the threshold for a nuclear war. This ramping up of tensions came after US President Biden reportedly gave permission for US missiles to be fired deep into Russian territory.
Meanwhile, Indian equities rose over 1% in early trade before giving most of the gains back towards the end of the session. Sustained portfolio outflows of around $15 billion since October have pulled the Rupee lower. However, regular interventions from the RBI have supported the Rupee.
The US Dollar remained unchanged on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies, rose 0.01%, trading at 106.19 after losing ground in the previous session.
The USD is holding steady after a bout of profit-taking in the previous session resulting in the USD falling away from its 2024 high.
Today, the US economic calendar is quiet, leaving the USD drifting against its major peers. The USD has traded up 2% so far this month on expectations the Federal Reserve will cut interest rates at a slower pace amid solid economic growth, a resilient jobs market and as inflation remains above the Fed’s 2% target.
Looking ahead, the US economic calendar is relatively quiet until Friday, when attention will turn to US business activity data.