• Indian Rupee (INR) supported by upbeat mood
  • OECD growth forecast to 2.7%
  • US Dollar (USD) falls with the Fed in focus
  • US Fed meeting next week

The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady for a second straight session. The pair rose 0.02% yesterday, settling on Tuesday at 82.51. At 15:30 UTC, USD/INR trades -0.02% at 82.49 and trades in a range of 82.47 to 82.62.

The Indian Rupee was supported by a broadly upbeat market mood after the OECD upwardly revised the global growth outlook. The Paris-based organization’s latest economic forecast was raised to 2.7% this year, up from 2.6%, as high inflation and restrictive monetary policy continue to weigh on growth.

However, the OECD said that they see the global economy turning a corner but believe it still faces a long road ahead to strong growth.

Looking ahead, growth in 2024 is expected to increase modestly to 2.9% but this remains below the 3.4% average seen in the seven years prior to the pandemic.

The US Dollar is across holding steady against the Rupee but is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.34% at the time of writing at 103.82, rebounding from losses in the previous session.

The US dollar trades under pressure and a quiet session, with no major catalysts, leaving investors to look ahead to the Federal Reserve interest rate decision next week.

The market is increasingly convinced that the Fed will pause interest rate hikes in June and hike again in July. According to the CME fed watch tool, the market is pricing in a 70% probability of a pause this month.

There is still one more inflation print which comes on Tuesday ahead of the Wednesday rate decision. The US dollar could struggle to make strong moves in either direction ahead of the data.

The dollar has lost some momentum in the past week as investors unwind long bats, which were taken as hedges before US government raised its debt ceiling.