The Indian Rupee is trending higher versus the weaker US Dollar for a second straight session on Wednesday.
Having opened the day at 73.810, USD/INR is trading -0.7% at 73.610 at 11:00 UTC. This is at the lower end of the day’s trading range of 73.588 – 74.015.
The USD/INR closed Tuesday’s session -0.05% at 74.150, as the Indian Rupee rebounded from a 17 month low versus the dollar.
Indian Rupee Advances Despite Growth Outlook Cut
Volatility in the Indian Rupee has been high in recent trading sessions as investors continue to worry over the economic impact of coronavirus. The killer virus has now infected over 115,000 people globally, killing over 4,200.
The move higher for the Indian Rupee comes despite Moody’s slashing Indian growth projections for this year. The ratings agency said that they now expected growth for 2020 to be just 5%, down from 5.3% -5.4%. Moody’s pointed to an extensive and prolonged slump as a result of the coronavirus outbreak will reduce growth in Asia’s third largest economy. The virus is causing simultaneous supply and demand shocks hitting small businesses and broader economies.
Just under one month ago Moody’s had reduced India’s growth projection from 6.6% to 5.4% for this year.
US Dollar Drops On Trump’s Silence
The US dollar is trading on the back foot against many of its peers as investors grow increasingly sceptical over US fiscal stimulus packaged announced by President Trump earlier in the week. Trump announced a “major” and “very dramatic” economic support package for the US on Monday evening. However, there have been no details since. The silence from the White House has raised concerns that any stimulus package is being delayed.
Also weighing on the value of the dollar, re growing expectations that the Federal Reserve will cut interest rates again in March at its scheduled monetary policy meeting, later in the month. This would come after the Fed cut interest rates by 50 basis points last Monday. The BoE also cut interest rates by 50 basis points in a surprise, emergency cut today.
