USD/INR: Rupee rises, USD awaits inflation data
- Indian Rupee (INR) Rises Despite Falling Domestic Stocks
- Oil rebounds on supply problems
- US Dollar (USD) Falls Snapping 6-Day Winning Run
- US PCE inflation data due
The US dollar and Indian rupee (USD/INR) exchange rate is down on Friday, wiping out gains from the previous session. The pair settled up +0.25% on Thursday to 76.60. As of 11:00 UTC, USD/INR is trading -0.24% at 76.42. The pair is expected to trade flat throughout the week after two consecutive weeks of gains.
The rupee is benefiting from a weaker dollar and despite the drop in domestic equities. The Sensex closed down -0.8% at 57,060 and the Nifty 50 also ended down 0.8% at 17,102.
Indian stocks closed lower on worries about rising inflation. Declines in Reliance Industries and Axis Bank dragged indices down.
Meanwhile, oil prices pushed north as supply issues took center stage. Germany has now voted in favor of an embargo on Russian oil, which means the EU is about to ban Russian oil. West Texas Intermediate rose 3% yesterday and is trading down 1% today.
The US dollar is falling on all levels. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading -0.6% at the time of writing at 102.97, snapping a six-day winning streak.
The US Dollar rose again yesterday despite weaker than expected US economic growth. The US economy unexpectedly contracted -1.4% in the first quarter of the year, at an annualized rate, compared to growth of 6.9% in the last quarter of 2021. The reading was well below the growth forecast of 1.1%. However, the slowdown was due to higher imports and lower inventories rather than consumer spending which actually increased.
Today, the focus is on US Personal Consumption Expenditure, PCE, which is the Fed’s preferred measure of inflation. PCE is expected to rise to 6.5% YoY in March from 6.4%. However, the core PCE is expected to decline to 5.3% from 5.4%, which could help ease fears of runaway inflation.