- Indian Rupee (INR) rises for a sixth day
- RBI is expected to leave rates unchanged
- The US Dollar (USD) is rising versus major peers
- US stocks continue to sell off, driving safe-haven flows to the USD
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling for a sixth straight session. The pair rose 0.04% in the previous session, settling on Wednesday at 90.39. At 17:30 UTC on Thursday, the pair is down -0.21% to 90.20.
The Indian Rupee continues to rise after U.S. President Donald Trump and Indian Prime Minister Narendra Modi confirmed a trade deal on Monday.
The deal will reduce tariffs on Indian exports to Washington to 18% from 50%, which had included punitive tariffs on Russian oil imports.
The trade agreement has resulted in significant buying by overseas investors in the Indian stock market. On Wednesday, the net investment by foreign institutional investors in the cash segment of the Indian stock market was 5236.28 crore.
Attention is now turning to the RBI rate decision tomorrow, where the central bank is widely expected to keep the repo rate unchanged at 5.25% as it awaits the impact of recent interest rate cuts on the economy.
The US Dollar is falling versus the Rupee but rising versus its major peers. The US Dollar Index, which measures the US dollar against a basket of major currencies, is up 0.15% to 97.76, adding to yesterday’s 0.15% gain.
The US dollar is rising to a 1.5-week high, boosted by hawkish comments from Federal Reserve Governor Lisa Cook and safe haven flows amid a steep sell-off in U.S. stocks.
U.S. stocks continue to fall sharply, led by the tech sector, as concerns
Federal Reserve Governor Lisa Kirk supported the dollar, saying she now sees risks tilted toward higher inflation. She made no mention of the weaker jobs market, reinforcing expectations that the Federal Reserve could keep interest rates on hold for longer.
Meanwhile, weakness in the US labour market has pulled the dollar away from session highs. Challenger job cuts posted their biggest decline since January 2009, and weekly jobless claims rose by more than expected to an 8-week high. Separately, the JOLTS job openings unexpectedly fell to a 5.25-year low, which could anchors of a dovish factor for the Federal Reserve