- Indian Rupee (INR) falls for a second day
- Indian domestic equities fall & industrial production rises
- US Dollar (USD) rises versus major peers
- Fed minutes show concerns over outlook
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising for a second straight day. The pair rose 0.28% in the previous session, settling on Tuesday at 85.33. At 19:30 UTC USD/INR trades 0.39% higher at 85.93 and traded in a range of 85.48 to 86.07.
The Indian Rupee is falling against a stronger U.S. dollar, tracking domestic equities lower. The Indian Sensex closed 0.3% down, marking a second straight day of losses amid fund outflows due to large block deals and increased primary market activity.
ITC tumbled 3.2% after BATS sold a 2.5% stake in the company via a block deal.
On the data front, India’s industrial output increased by 2.7% year on year in April. This was ahead of the 1% economists’ forecast and down from the 3% increase in March.
Meanwhile, higher oil prices are also dragging on the rupee, given that India imports 80% of its oil requirements. Oil prices rose Wednesday amid supply concerns, which overshadowed expectations that OPEC+ would increase output in July.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.35% to 99.87, marking a second straight day of gains.
The U.S. dollar is rising, extending gains from yesterday, following stronger-than-expected U.S. consumer confidence and after the minutes of the Federal Reserve meeting showed caution among policy makers.
In the meeting on May 6 to 7 the Fed left interest rates unchanged at 4.25 to 4.5% amid concerns among policymakers that tariffs risk slowing the economy and increasing inflation. The minutes showed the Fed members are increasingly uncertain about the economic outlook and attentive to risks on both sides of the dual mandate.
The Fed minutes come after consumer confidence data which showed an improvement in consumer sentiment in May as US-China trade relations improved and as Trump agreed to give more time to the EU before increasing trade tariffs to 50%.
