• Indian Rupee (INR) rises as domestic equities gain
  • Nifty50 & Sensex are at a monthly high
  • US Dollar (USD) rises for an 8th straight week
  • Strong data boosts hawkish Fed bets

The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a second straight day. The pair fell -0.06% in the previous session, settling on Thursday at 83.15. At 10:30 UTC, USD/INR trades -0.22% at 83.96 and trades in a range of 82.95 to 83.26. The pair is set to rise 0.34% this week, marking its second straight week of gains.

The Indian rupee is edging higher, but a sustainable recovery is looking unlikely as the outlook for the US economy remains strong and as concerns over the Chinese economy remain.

Today, the Indian currency is finding support from an upbeat performance in domestic equities. Indian shares inched up to their highest level in over a month on Friday thanks to gains in energy stocks.

Both the Nifty 50 and the Sensex are on track for their second straight week of gains. Some analysts consider that after last week’s GDP data India could be seen as a safe haven amid rising global uncertainty and geopolitical tensions.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.14% at the time of writing at 104.92, snapping a 6-day winning run.

The US dollar is falling today but is set to rise across the week, marking its eighth straight weekly gain and the longest winning run in over nine years.

The dollar has pushed higher as data from the US has highlighted the economy’s resilience there and boosted expectations that the Federal Reserve may need to raise interest rates again before the end of the year.

Data released across the week has painted quite an upbeat picture for the economy. The US service sector, the dominant sector in the economy, unexpectedly grew at a faster clip in August, while jobless claims fell to their lowest level since February.

The market is expecting the Federal Reserve to keep interest rates on hold when it meets later this month. However, the stronger than expected economic picture means that the market is questioning whether the Fed could raise interest rates again in the November meeting. This upward revision to rate hike expectations has lifted the greenback.

Looking ahead, there is no major market data to be released from EU S today. Attention will be on Federal Reserve speaker Michael Barr who could shed more light on the future path for US interest rates.