The Indian Rupee fell 50 paise against the US dollar in early trade on Friday as the number of global coronavirus cases reached 1 million and as investors prepared themselves for an extended period of elevated risk uncertainty.
At 11:15 UTC, USD/INR was trading at 76.06 on the inter-bank forex market after having opened at 75.97 and settling on Thursday at 75.60. Forex markets in India were closed on 1st and 2nd April for Ram Navami.
Indian Rupee Declines As Sensex Tumbles
The Rupee was edging lower on Friday amid growing fears of a coronavirus inspired economic slowdown in India and globally. The most recent data from Europe and the US has been dismal sending risk sentiment crashing lower. Investors pulled money from Indian equities with the Sensex slumping over 6% so far in April and 23% across March.
According to analysts polled by Reuters, the India Rupee is expected to stay weak versus the US Dollar until the coronavirus pandemic eases. However, the exact path of the Rupee, they say, will depend on how successful the Indian government is at slowing and containing the spread of coronavirus.
India currently has 2300 cases of coronavirus among its 1.3 billion population. The second most populous nation has been on a 21-day lock down since 25th March.
Non-Farm Payroll In Focus
The Dollar is trading on the front foot after data yesterday showed that 6.6 million Americans filed for unemployment claims last week. This would have been an unimaginable figure just a few weeks ago. The previous week, 3.3 million Americans filed for unemployment claims. This puts the total at an eye watering 10 million new claims across the past two weeks as states go into lock down to prevent the spread of coronavirus. The restrictive measures to stem the spread of the virus have resulted in millions of companies collapsing causing a devastating effect on the labour market.
Today investors will look towards the US non-farm payroll report. 100,000 jobs are expected to have been lost in March. This is much lower than the 10 million jobless claims. The reason for this difference is because the non-farm payroll only measures up until 12th March. The first state wide lock down was on 20th March. Therefore, today’s data is already considered stale. Investors will need to wait for April’s data for a truer picture of the impact.