- Indian Rupee (INR) falls after 2-days of gains
- Domestic equities gained led by financials
- US Dollar (USD) falls against its major peers
- US retail sales & jobless claims were weaker than forecast
The US Dollar Indian Rupee (USD/INR) exchange rate rose on Thursday, snapping a two-day losing run. The pair fell 0.17% in the previous session, settling on Wednesday at 86.38. At the time of writing, USD/INR trades +0.25% at 86.59 and is in a range of 86.32 to 86.65.
The Rupee has struggled despite a weaker USD in recent sessions and strong domestic equity markets. The Sensex and the Nifty 50 closed 0.4% higher on Thursday led by financials on strong corporate earnings and tracking other global markets higher.
The Ruppee fell as dollar demand from foreign banks, and importers overshadowed lower US bond yields. Intervention from the Reserve Bank of India likely stemmed losses.
Elevated oil prices are a cause for concern. Oil prices have risen sharply in recent sessions, reaching a peak of over $80 per barrel yesterday amid concerns over tighter oil supply. Today, the price has eased slightly owing to the ceasefire in Gaza. However, oil still trades around its highest level in weeks.
The US Dollar is rising against the Rupee but is falling against major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, trades at -0.11%, trading at 108.88 on Thursday, marking a third straight day of losses.
The USD is willing for a third straight day after weaker-than-expected U.S. data. US retail sales raised 0.4% month on month in December, and the downturn applique revised 0.8% in November, but below expectations of 0.6%. However, this was still a solid number. Not too hot to fuel inflation worries and not too cold that it raises concerns over the health of the economy.
The same could be said for US jobless claims which unexpectedly rose to 217k to 203k.This was above forecasts of 210k.
The data keeps the prospect of a couple of rate cuts this year on the table. The market has lifted rate cut expectations this week after US underlying inflation unexpectedly cooled to 3.2% annually in December.
