- Indian Rupee (INR) holds steady despite falling equities
- Oil prices drop offering some support
- US Dollar (USD) falls versus major peers on recession fears
- Fed rate decision due on Wednesday
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Monday after gains from the previous session. The pair gained 0.09% across last week settling on Friday at 79.83 after trading in a range 79.70 to 80.07. At 10:00 UTC, USD/INR trades +0.01% at 79.83 after hitting a fresh all-time high.
The Rupee is failing to capitalise on a weaker USD, as Indian domestic equities fall lower. Indian shares dropped on Monday after booking the longest winning run since last October. Heavyweight Reliance Industries fell after weaker than expected earnings. Investors were also cautious ahead of the upcoming central bank meeting.
The Nifty 50 trades down 0.6% and the Sensex fell 0.65% after rising for the past six straight sessions.
Separately falling oil prices offered support to the Rupee. Oil prices fell over 1% as fears of a global economic slowdown hurt the demand outlook. Oil prices are testing the 200 day moving average, a key support level.
The US Dollar is steady against the Rupee but is falling against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.07% at the time of writing at 106.65 after falling 1.3% across last week.
The USD fell across last week as weak data prompted recession fears. On Friday US data revealed that business activity contracted in July for the first time in almost two years. A steep slowdown in the service sector overshadowed small growth in the manufacturing sector. The S&P Global composite PMI fell by more than expected to 47.5 in July raising fears of a recession.
The US economic calendar is quiet today but all eyes will be on the Federal Reserve when they meet tomorrow for the two-day FOMC meeting. Expectations are for the US central bank to hike interest rates by 75 basis points, after raising rates by 75 basis points in June.