USD/INR: the rupee appreciates despite high oil prices
- Indian Rupee (INR) Rises Despite High Oil Prices
- Domestic stocks close slightly lower
- US dollar (USD) rises on hawkish Fed bets
- U.S. PMIs, Durable Goods and Upcoming Unemployment Insurance Claims
The US dollar and Indian rupee (USD/INR) exchange rate fell on Thursday, paring gains from the previous session. The pair settled up +0.5% on Wednesday to 76.52. As of 11:30 UTC, USD/INR is trading -0.26% at 76.32.
The rupee fell yesterday as oil prices soared. Oil soared 4% after Russian President Putin said hostile countries should pay for their gas in roubles. The order caused gas prices to skyrocket, driving up the entire energy complex.
West Texas Intermediate hit $118 in early trading today and has since pulled back slightly, helping risk sentiment.
India imports more than 80% of its oil needs, which makes it very vulnerable to variations in oil prices.
The focus will be on President Biden’s meetings in Europe and the new sanctions that will be imposed on Moscow.
Domestic stocks fell slightly. The Sensex closed -0.1% at 57,595. The Nifty 50 closed -0.13% at 17,222.
The US dollar is down against the rupee but up against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading +0.17% at the time of writing at 98.78, marking a second straight day of gains.
The US Dollar rose yesterday in risky trade on concerns over soaring oil prices and the impact it will have on businesses and households. The US stock market fell sharply as investors sold riskier assets such as stocks.
Expectations of a more hawkish response from the Federal Reserve sent the US dollar higher. More Fed speakers are increasingly vocal about the need to raise interest rates more aggressively throughout the year.
Looking ahead, there is plenty of data for investors to digest, including US PMI data which is expected to show a slight slowdown in growth, durable goods orders and jobless claims which are expected to fall to 211,000.