• Indian Rupee (INR) trades water on Tuesday
  • Risk appetite improves on China optimism
  • US Dollar (USD) falls in risk off trade
  • US house prices continue to fall

The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Tuesday after small losses in the previous session.  The pair fell -0.08% yesterday settling at 81.65. Today, at 16:30, USD/INR trades +0.01% at 81.65, trading in a range between 81.54 to 81.74.

The Rupee has been supported by rising domestic equities and a risk on mood, offsetting a rebound in oil prices.

The market mood was broadly upbeat today after Beijing pledged that it would increase its pace of Covid vaccinations among senior citizens. This was broadly interpreted as a first step towards easing Covid restrictions, lifting the risk sentiment. As a result, riskier assets such as shares and risker currencies such as the Rupee is in demand.

While riskier assets enjoyed a boost, oil prices also recovered from steep losses yesterday and rallied 3% as the demand picture improved. Improved mobility in China, the world’s largest oil importer, should result in demand picking up. West Texas Intermediates trades at 78$.90 at the time of writing.

The US Dollar is falling against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.15% at the time of writing at 106.72, snapping three days of gains.

The US dollar is falling in today on safe-haven outflows and as investors digested the latest macroeconomic data.

The S&P/Case-Shiller Home price index fell by more than expected in September highlighting the slowdown in house prices as higher mortgage rates eroded demand. The home price index fell by 0.8% month on month. On an annual basis prices rose 10.6% in September down from 12.9% in August.

Meanwhile, US consumer confidence fell by less than forecast in November to 100.2, down from 102.2 in October but ahead of the 100-level forecast.  Meanwhile, inflation expectations increased to 7.2% from 6.9%.

The data comes as the Federal Reserve considers whether to slow the pace of rate hikes in December.