- Indian Rupee (INR) falls as Russia conflict worsens
- Oil prices jump 20% this week
- US Dollar (USD) rises on safe-haven demand & Fed rate hike
- US non-farm payroll smashes forecasts
The US Dollar Indian Rupee (USD/INR) exchange rate trades higher on Friday for a second straight session. The pair settled +0.44 higher at 75.93 on Thursday. At 11:30 UTC, USD/INR trades +0.72% at 76.49. The pair is on track to gain 1.91% this week.
The Rupee has fallen lower to a two-and-a-half-month low amid the deepening crisis in Ukraine, with trades watching out for potential central bank intervention.
Oil prices have risen over 20% so far this week as fears over supply send the marker into a panic. There are also growing fears that the Biden administration could impose sanctions on oil next which could send oil prices higher still. This is bad news for India which imports over two-thirds of its oil. As oil prices shoot higher, India is set to hike prices at the pumps from next week, raising concerns over inflation.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +1% at the time of writing at 98,74 adding to yesterday’s gains. The US dollar is set to gain 2.2% across the week,
Safe-haven flows are lifting the USD as the Russian invasion into Ukraine deepens. As well as safe-haven demand the greenback is also being supported by strong data and by expectations of the Fed hiking rates this month.
Federal Reserve Chair Jerome Powell gave a second testimony before Congress on Thursday and confirmed that the US central bank would hike rates at the FOMC meeting on 17th March.
Today, the non-farm payroll showed that the US economy added 678,000 jobs in February, this was above the 400,000 that was forecast. This was also above January’s figure was then revised higher to 481,000. The unemployment rate fell from 4% to 3.8%.
