- Indian Rupee (INR) rises across the week
- US-Indian trade relations improve
- The US Dollar (USD) falls versus major peers across the week
- Trump still to meet China’s Xi Jinping
The US dollar-to-Indian rupee (USD/INR) exchange rate was unchanged on Friday. The pair rose +0.20% in the previous session, settling on Thursday at 87.99. At 21:30 UTC on Friday, USD/INR traded -0.01% lower at 87.99 and traded in a range of 87.71 to 88.11. The pair fell -0.85% across the week.
The Indian rupee has strengthened against the US dollar this week amid growing expectations that the US and India could reach a trade deal soon. This speculation was bolstered after President Trump announced that India is ready to halt oil purchases from Russia.
The US had applied an additional 25% tariff as a penalty for India buying Russian oil, which is helping Moscow continue its war against Ukraine.
Signs of improving US-Indian trade tensions are favourable for the Indian rupee. Meanwhile, foreign institutional investors (FII) turned positive at the end of the week after recent outflows.
The US Dollar fell against its major peers on Friday. The US Dollar Index, which measures the greenback against a basket of major currencies, is traded +0.1% at 98.43, but still fell across the week.
The US dollar rose modestly on Friday but still fell across the week, amid concerns about trade tensions and unease about some regional U.S. banks.
Despite Trump’s proposed 100% tariffs on goods from China, Trump confirmed that he would still meet with Chinese President Xi Jinping in two weeks in South Korea in an effort to ease trade tensions.
Meanwhile, the ongoing U.S. government shutdown means that US economic data is scarce, giving investors less certainty over what’s happening in the economy. The Federal Reserve is also flying with limited visibility ahead of the meeting on the 28th and 29th of October.
This week will see the release of key US inflation data as a one-off.
