INR: Underperforming Amid Strong Dollar Demand From Local Importers

The rupee gapped lower at the Asia open, falling as much as 0.55% against the greenback before its losses were partially pared towards the start of the European session.

• Comments from Trump, who stated that India has made an offer to drop tariffs on US goods, provided only brief and moderate support for the currency, with Reuters reporting that dollar bids on account of corporate hedging and portfolio outflows weighed on the rupee. Similarly, Bloomberg say there has been strong dollar demand from local oil importers.
• Meanwhile, India’s Nifty 50 has risen over 1.5% today, placing the index at its highest level since October last year. NSE data showed Indian equities had inflows of +$19m as of Monday, with total inflows standing at +$850m over the past 5 days. The return of foreign investor flows has been INR-positive, while the ceasefire agreement between India and Pakistan, expectations of a US-India trade deal and broader greenback weakness have all boosted sentiment towards Indian assets.
• India's trade data due later today will be in focus, followed by a string of US economic data and remarks from Fed Chair Powell.