• Indian Rupee (INR) rises despite domestic equities falling  
  • Oil jumps on supply concerns 
  • US Dollar (USD) falls snapping a 6-day winning run 
  • US PCE inflation data due 

The US Dollar Indian Rupee (USD/INR) exchange rate is falling on Friday paring gains from the previous session. The pair settled +0.25% higher on Thursday at 76.60. At 11:00 UTC, USD/INR trades -0.24% at 76.42. The pair is set to trade flat across the week after two straight weeks of gains. 

The Rupee is capitalizing on a weaker USD and despite domestic equities finishing lower. The Sensex closed -0.8% lower at 57,060 and the Nifty 50 also ended 0.8% lower at 17,102. 

Indian shares closed lower amid concerns over rising inflation. Declines in Reliance Industries and Axis Bank dragged the indices lower. 

Meanwhile, oil prices pushed northwards as supply concerns took center stage. Germany has now voted in favour of a Russian oil embargo meaning that the EU is one step closer to banning Russian oil. West Texas Intermediate rose 3% yesterday and trades 1% higher today. 

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.6% at the time of writing at 102.97, snapping a six-day winning run. 

The US dollar rose again yesterday despite weaker than expected US economic growth. US economy unexpectedly contracted by -1.4% in the first quarter on the year, annualized, this was down from 6.9% growth in the last quarter of 2021. The reading was well below the 1.1% growth forecast. However the slowdown was due to rising imports and lower inventories rather than consumer spending which actually rose. 

Today the focus is firmly on the US Personal Consumer Expenditure, PCE, which is the Fed’s preferred measure of inflation. Expectations are for PCE to rise higher to 6.5% year on year in March up from 6.4%. However, core PCE is expected to tick lower to 5.3%, down from 5.4%, which could help calm fears over runaway inflation.