- Indian Rupee (INR) falls after gains yesterday
- Foreign institutional investors’ sellout of Indian equities
- US Dollar (USD) rises versus major peers
- USD benefits from Yen & Euro weakness
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising after losses yesterday. The pair fell -0.02% in the previous session, settling on Monday at 88.72. At 16:30 UTC, USD/INR trades 0.05% higher at 88.74 and trades in a range of 88.69 to 88.78.
The Indian rupee edged modestly lower as US-India trade tensions remain.
The US economy charges 50% tariffs on imports from India, which is among the highest in the world, as the US punishes New Delhi for purchasing oil from Russia. The US claims these funds from India are ultimately supporting Russia to continue its war with Ukraine.
U.S.-India trade tensions remain a dampener for sentiment among foreign investors towards India. In the July-September period, foreign institutional investors (FIIs) sold equities worth Rs 1,29,870.96 crore, and the sell-off by FIIs is continuing in October.
However, despite this continuing selling, the Indian stock market has performed well over the last three days, with the Nifty 50 gaining 2.45%.
The US Dollar is rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading up 0.34% at 98.44, marking a second day of gains.
The US dollar is pushing higher for a second day, boosted by yen and euro weakness amid political and fiscal uncertainty in France and Japan.
Meanwhile, the US government shutdown continues for a seventh straight day with few tangible signs of progress towards a funding deal.
The ongoing shutdown means that the US economic calendar was quiet. The only figures released show that consumers expect higher inflation in the year ahead.
Expectations for consumer prices to increase one year ahead jumped to 3.4% in September, up from 3.2% in August. Meanwhile, estimates for annualised inflation 5 years ahead also ticked up to 3% from 2.9%.
Attention now turns to a plethora of Fed speakers, followed by the FOMC minutes tomorrow.
