• Indian Rupee (INR) rises along with equities
  • Sensex & Nifty 50 rise boosted by banking stocks
  • US Dollar (USD) falls as the Fed hikes rates by 75 bps
  • US GDP data due

The US Dollar Indian Rupee (USD/INR) exchange rate is falling on Thursday after holding steady in the previous session. The pair ended flat at 0% yesterday settling on Wednesday at 79.84 after trading a range 79.77 to 79.99. At 11:00 UTC, USD/INR trades -0.04% at 79.81.

The Indian Rupee is supported by the weaker USD and the improving market mood. Riskier assets and currencies are in favour. Indian shares are rising, jumping to the highest level in 12 weeks boosted by a surge in banking stocks.

Lender Bajaj Finance smashed its earnings estimates helping the Sensex rise 1.3% and the Nifty 50 rose 1.2%.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.15% at the time of writing at 106.38 after falling -0.73% yesterday.

The US dollar is falling across the board after the Federal Reserve raised interest rates by 75 basis points, as expected, for the second straight meeting. The more took rates to top 2.25% – 2.5% the level which policymakers consider neutral.

Federal Reserve Chair Jerome Powell noted weakness starting to show up in the US economy, particularly in spending and production. Powell said that the Fed will no longer be giving forward guidance given the uncertainty in the US economy.

Given that the next meeting is not until September, there will be two jobs reports and two inflation reports before the next decision.

Looking ahead the US GDP data will be in focus. Expectations are for the US economy to rebound back into growth in the second quarter after contracting -1.6% annually in the first three months of the year.  Weaker than forecast economic growth could pull the USD lower.