- Indian Rupee (INR) rises for second day
- Indian stocks plunge 2% on trade tariff fears
- US Dollar (USD) falls against its major peers
- Fed Powell reiterated the Fed is in no rush to cut rates
The US Dollar to Indian Rupee (USD/INR) exchange rate is falling for a second straight session. The pair fell 0.16% in the previous session, settling on Monday at 87.49. At the time of writing the USD/INR trades 0.82% lower at 86.77 and is in a range of 86.64 to 87.57
The Ruppe is rising despite Indian stocks slumping. Indian stocks have lost around $1809 billion in market value in just two days this week since Trump announced reciprocal tariffs on several countries, which might include India.
The Sensex plunged 1.3% on Tuesday and has fallen 2% in the past two days. The more domestically focused indices have tumbled 5%.
The selloff in stocks comes after Trump’s top economic advisor said that India has very high tariffs, making it vulnerable to reciprocal tariffs.
Even so, the Rupee is recovering from its record low, helped by an RBI intervention as the central bank sold between $4 billion to $7 billion to support the currency.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling 0.24%, at 108.06, snapping a three-day winning run.
The US dollar is falling lower despite Federal Reserve chair Jerome Powell saying the central bank is in no rush to adjust interest rates. Speaking before Congress on the first day of his semiannual testimony, Powell once again signaled that policymakers would be patient before low interest rates further.
His remarks largely echoed his comments in January after the Fed policymakers left interest rates unchanged.
Treasury yields increased after Powell spoke, but stocks moved lower, and the USD fell. Attention now turns to US inflation data, which is expected to show that CPI held steady at 2.9% year on year in January, while on a monthly basis, inflation is expected to rise 0.3% month on month, down from 0.4% in December.
