- Indian Rupee (INR) advances, tracing domestic equities higher
- Vaccine optimism continues to drive risk flows
- US Dollar (USD) slips on safe haven outflows as Trump concedes
- US Consumer confidence could show resilience
The US Dollar Pakistan (USD/INR) exchange rate is heading southwards on Tuesday, paring gains from the previous session. The pair settled +0.2% higher on Monday at 74.25. At 11:15 UTC, USD/INR trades -0.3% at 74.01 at the low of the day.
Vaccine optimism continues to drive the global markets on Tuesday, after AstraZeneca revealed yesterday that its vaccine candidate is 90% effective with a preliminary half dose or 70% effective with a single dose. Furthermore, the vaccine can be stored at room temperature making distribution simple compared to peers Moderna & Pfizer’s vaccine candidates.
This news is lifting risk appetite. Risk on trade is boosting demand for riskier assets such as stocks and currencies such as the Indian Rupee whilst dragging on demand for the US Dollar.
The Indian benchmark index closed at a record high, with the Nifty 50 topping 13000 for the first time, boosted by hopes that a covid vaccine will spur a faster economic recovery.
The Indian Nifty has rallied 12% so far in November. Monthly FII inflows of $6.5 billion into Indian equities have been recorded in November. This is the most since December 2006.
Meanwhile rising oil prices are keeping gains in the Rupee capped. West Texas Intermediate trades +1.2% higher at $40.30 as the demand outlook improves on the back of the vaccine news.
The US Dollar is trading lower across the board as investors no longer seek out its safe haven properties.
Adding to the upbeat mood, Trump has signalled that he is willing to accept Joe Biden as the winner of the US Presidential Elections, after liking a tweet that offers official acknowledgment of Joe Bidens win.
Attention will now turn to US consumer confidence data. US retail sales have recovered surprisingly well from the March / April collapse, as consumer confidence has remained resilient. Another solid month could lift the greenback