USD/INR: Rupee extends losses as Russian war fears grow
- Indian rupee (INR) falls as fears over war with Russia escalate
- Indian stocks fall for fifth straight session
- The US dollar (USD) falls against its major peers
- Expected US PMIs
The exchange rate of the US dollar and the Indian rupee (USD/INR) is on the rise after two consecutive days of decline. The pair settled down -0.23% on Wednesday to 74.49. As of 11:30 UTC, USD/INR is trading +0.40% at 75.79.
The rupiah is following domestic equities lower. Indian stocks fall for a fifth consecutive session as tensions between Russia and Ukraine rise.
The Nifty 50 fell 2% earlier in the day, pushing below the 200-day moving average, a key support, before resuming session lows. The Nifty 50 closed down 0.7%.
The mood hazard came when Russian President Putin ordered troops into parts of Ukraine, which are occupied by separatists; regions that Putin yesterday recognized as independent of Ukraine.
The move drew widespread condemnation from the West, with the promise of widespread sanctions to come.
The US dollar is up against the rupee but down against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading -0.15% at the time of writing at 95.93, adding to the slight gains from the previous session.
While the US Dollar started today’s session on the right foot, it quickly gave up its gains. Interestingly, the initial flow into safe havens has slowed or reversed, with gold actually falling lower.
While tensions in Eastern Europe will continue to dominate trading, attention will also turn to US trading activity data due for release and provide insight into Omicron’s recovery.
The main focus will be on the service sector, the sector which has in the past been the hardest hit by covid-related restrictions.
The services sector PMI is expected to come in at 53, where the 50 figure separates expansion from contraction. However, it should be noted that in Europe and the UK, the services sector PMIs are significantly higher than expected. A strong reading could boost the USD.