New welfare measures from the Indian government announced on Thursday have helped both Indian shares and the rupee make substantial gains. The rupee is playing some catch-up on Thursday since Indian FX markets were closed for a national holiday on Wednesday.
The dollar is also under some downward pressure before what is expected be a very ugly weekly jobless claims data point later today.
USD/INR was lower by 99 pips (-1.30%) to 75.36 with a daily range of 75.16 to 76.37 as of 10am GMT.
The currency pair tanked from record highs above 76 to just above 75 in early trading on Thursday, leaving it flat on the week at -0.04%.
Indian rupee jumps on new coronavirus welfare scheme
Indian Finance Minister Nirmala Sitharaman announced a series of new welfare measures that it is hoped will get people the basics they need if work or food production is affected by the coronavirus. It includes a Rs 1.70 lakh crore Pradhan Mantri Gareeb Kalyan scheme where poor people will receive 5 kilograms of wheat or rice and 1 kilogram of preferred pulses for free each month for the next three months.
Additionally, news that the Senate had passed a $2 trillion emergency bailout package for American people and businesses was taken as a cue to buy up riskier currencies like the rupee and sell havens like the dollar.
US dollar under pressure before jobless claims data
The dollar is coming down into many expect to be a huge leap in layoffs and unemployment insurance claims in the previous week. However, if risk sentiment deteriorates because the number is that bad, the dollar could eventually benefit as a haven.
Many businesses will have had to close up shop and lay off employees when travel restrictions and stay-at-home orders were imposed by State governments.
Consensus estimates are between 1 and 1.5 million weekly US jobless claims with some outlier estimates as high as 4 million. A large number would make it likely that the US records its first monthly jobs contraction in next week’s March non-farm payrolls report.