- Indian Rupee (INR) falls, extending last week’s losses
- Oil prices spiked to a 5-month high after the US attack on Iran
- US Dollar (USD) rises versus major peers on safe-haven flows
- US PMIs beat forecasts amid a resilient economy
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising, adding to last week’s gains. The pair rose 0.55% in the previous week, settling on Friday at 86.58. At 21:30 UTC, USD/INR traded 0.06% higher at 86.58 and traded in a range of 86.91 to 85.78.
The Indian rupee fell on Monday alongside its Asian peers as investors turned to safe havens such as the US dollar amid rising tensions in the Middle East. However, oil prices retreating from five-month highs helped cushion losses.
The market remains focused on Iran’s response to the US attack over the weekend on its nuclear facilities.
WTI crude rose to a five-month high of 78.40 before easing lower. Still, markets have been volatile amid fears that Iran’s retaliation could include closing the Strait of Hormuz, which carries around one-fifth of the global crude supply.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.12% to 98.84, adding to last week’s gains.
The US dollar is proving to be the safe haven of choice amid geopolitical risks, and as the markets await a response from Iran.
U.S. data show that economic activity was stronger than expected in June. The services PMI is less than expected at 53.1, down from 53.7 in May but ahead of expectations of 52.9. Meanwhile, the manufacturing PMI held at 52, defying expectations of 51. The composite gauge, which is considered a good gauge for business activity, is slightly down at 52.8, down from 53. The level 50 separates expansion from contraction.
The data suggest that the US economy is holding up well despite concerns and uncertainties surrounding Trump’s trade tariffs.
Looking out across the week, Middle East headlines will likely dominate and overshadow any data releases.