- Indian Rupee (INR) rises after losses yesterday
- US- India trade call went well with another in February
- The US Dollar (USD) is falling versus major peers
- US retail sales, PPI and existing home sales in focus
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose -0.17% in the previous session, settling on Tuesday at 90.28. At 16:30 UTC on Wednesday, the pair is falling 0.06% at 90.23.
The Indian Rupee is rising amid improved hopes for the US-India trade deal. India’s external affairs minister announced on X that trade discussions with US Secretary of State Marco Rubio were good and will continue. Discussions included critical minerals, trade, nuclear cooperation, defence, and energy. In response, the US ambassador to India posted on X, noting that it was a positive call and that the next meeting will likely be in February.
Easing trade frictions between India and the US is beneficial for the rupee, which was Asia’s worst-performing currency last year. This was due to the steep tariffs the US imposed on imports from India, which reached 50% after the Trump administration added 25% punitive tariffs on oil imports from Russia.
Meanwhile, gains could be limited as foreign investors continued to sell out of their stakes in the Indian stock market. So far this January, foreign institutional investors (FII) have been net sellers on eight of the nine trading days.
The US Dollar is falling across the board. The US Dollar Index, which measures the US dollar against a basket of major currencies, is down 0.07% to 99.06, after gains yesterday.
The US dollar is adding lower, but losses are limited after stronger-than-expected U.S. economic data on retail sales, producer prices, and existing home sales.
US retail sales rose 0.6% month on month, ahead of expectations of 0.4%. Meanwhile, PPI, which measures inflation at the factory gate, rose 3% year on year ahead of expectations of 2.7%.
Existing home sales rose 5.1% month on month, a 2.5-year high.
Following the data, Minneapolis Fed President Neel Kashkari said the US economy is showing resilience and doesn’t see the impetus for the Fed to cut rates at the January meeting.