- Indian Rupee (INR) rises after losses
- Oil prices drop from $120 to $85
- The US Dollar (USD) is falling versus major peers
- US drops as Trump predicts a short war
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose 0.24% in the previous session, settling on Tuesday at 92.15. At 17:30 UTC on Tuesday, the pair is down 0.17% to 92.00.
The Indian rupee rises from near-record lows amid rising oil prices; however, worries about gas prices keep the mood cautious.
Indian shares rose on Tuesday, rebounding from sharp declines in previous sessions after President Trump said that the Middle East war could be over soon.
Following his comments, oil prices dropped from $120.00 a barrel yesterday to below $85 a barrel today.
At the same time, India has invoked emergency measures to divert gas supplies from non-priority sectors to key users amid the ongoing disruption of LNG shipments through the Strait of Hormuz.
India imports around half of its gas consumption, making it particularly vulnerable to the closure of the Strait of Hormuz and to force majeure in Qatar, which has shut off production.
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 0.56% to 98.62, after gains yesterday.
The US dollar is falling across the board as safe-haven flows unwind, as oil prices drop sharply.
The US dollar has been the safe haven of choice throughout the Middle East crisis. However, following President Trump’s comments, optimism has increased that the war will be shorter than initially feared.
That said, so far this is just talk, and the position has not fundamentally changed. In fact, the US Defence Secretary warned that the Iran war will only end when the enemy has been defeated.
Developments in the Middle East are attracting attention; however, US inflation figures are due tomorrow and are expected to show that US CPI.