- Indian Rupee (INR) is resilient
- Sensex rises to a record high
- US Dollar (USD) rises versus major peers
- Fed Chair Powell to testify
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a second straight session. The pair rose 0.11% yesterday, settling on Tuesday at 82.00. At 10:15 UTC, USD/INR trades +0.02% at 82.02 and trades in a range of 81.97 to 82.13.
The Rupee is showing some resilience against the stronger U.S. dollar as it is supported by a rise in domestic equities. India’s benchmark Sensex stock index rose to a record high while the nifty 50 closed in on its all-time high.
Persistent foreign inflows into Indian equities have pushed stocks to record highs, backed by a robust macroeconomic backdrop.
Foreign investors have invested more than $8.99 billion so far this financial year. In contrast, they were net sellers in previous fiscal years.
India’s economic growth has ramped up, accelerating in the March quarter, while inflation is cooling. India has emerged as one of the fastest-growing emerging economies.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.04% at the time of writing at 102.59, after a flat finish yesterday.
The US dollar is heading higher as investors look ahead to Federal Reserve chair Jerome Powell’s testimony before Congress later today. In the biannual address, Powell could offer more cues over the path of monetary policy and interest rates following mixed signals from US central bank last week.
While the Federal Reserve skipped an interest rate hike in June, policymakers signaled to two more rate hikes before the end of the year, taking the interest rate to 5.6%. However, the market seemed to focus on the fact that the Fed was almost done with hiking rates.
With this in mind, Powell could use the opportunity before Congress to hammer home his hawkish message that interest rates will stay higher for longer. A hawkish-sounding Fed Chair Powell could boost the US dollar.
