USD/INR: the rupee falls against the soaring dollar
- Indian rupee (INR) falls despite rising services activity
- Indian services PMI jumped to 57.9
- The US Dollar (USD) Rebounds Firmly from Yesterday’s Losses
- U.S. nonfarm payrolls data due tomorrow
The US dollar and Indian rupee (USD/INR) exchange rate rose on Thursday after four days of gains. The pair settled -0.6% lower on Wednesday at 76.02. As of 17:00 UTC, USD/INR is trading +0.7% at 76.55.
Activity in India’s dominant services sector grew at its fastest pace in five years in April as growing demand pushed companies to add workers for the first time since November. However, the surge in inflation remains a concern.
The S&P Global India Services PMI rose to 57.9 in April from 53.6 in March and well above the expected level of 54. The 50 level separates expansion from contraction.
Digging deeper into the numbers, new business hit a five-month high as COVID restrictions eased, however, new export business fell at the fastest pace in seven months amid war concerns. Russia.
The US dollar is up across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading +1.3% at the time of writing at 103.85, rebounding from losses of 0.85% during the from the previous session.
The US dollar fell to a one-week low in the previous session after Federal Reserve Chairman Jerome Powell threw cold water on the prospect of a 75 basis point rate hike at future meetings. The Fed raised interest rates by 50 basis points as expected and marked the biggest rate hike in 22 years. The Fed also began quantitative tightening to reduce its balance sheet which rose to $9 trillion during the pandemic.
Today, the US Dollar rebounds as it looks like with inflation at 8.5%, the market doesn’t think the Fed won’t hike 75 basis points.
Initial jobless claims in the United States rose more than expected last week to 200,000 from 180,000 the previous week.
There’s no more high-impact data expected today, but tomorrow the focus will turn to US nonfarm payrolls data.