- Indian Rupee (INR) extends gains from last week
- Indian equities rise, oil holds steady
- US Dollar (USD) trades flat versus major peers.
- Biden’s $1.9 trillion stimulus plan in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower, extending losses from the previous week. The pair shed -0.2% across last week settling on Friday at 72.98. At 12:00 UTC, USD/INR trades -0.1% at 72.91.
The Indian Rupee traced Indian shares higher on Monday as gains in banking stocks outweighed a drop in Reliance industries sparked by a steep decline of 30% in Q3 revenue in the oil to chemical business. The blue-chip Nifty 50 rose 0.1% whilst the Sensex advanced 0.05%. Broader Asian shares rose on expectations of
Oil prices are holding steady neither boosting nor dragging on the Rupee. West Texas Intermediate hovers around $52.30 +0.1% on the day as investors weigh up covid woes versus US stimulus optimism.
The US Dollar is trading quietly as investors await further stimulus news and as they look ahead to the Federal Reserve monetary policy decision later this week.
Joe Biden’s administration is increasing pressure on Congress to pass a $1.9 trillion covid relief bill. The President’s team warned that the US economy risked much greater economic crisis unless the massive stimulus package was approved. Joe Biden is making it clear that the relief plan is his top priority. This stance is boosting risk sentiment across the financial markets, driving demand for riskier assets such as stocks and the Indian Rupee, whilst dragging on demand for the safe haven US Dollar.
Should Joe Biden’s huge stimulus bill be approved, economists are expecting the US economy to record economic growth in the region of 5.8%, an upward revision from the previously expected 3.6%.
There is no high impacting US economic data due for release today. Attention will fall to the US FOMC rate decision on Wednesday and the US GDP reading for the final quarter of 2020 which is due on Thursday.