After two days of falling, the Indian Rupee is picking up against the US Dollar. The Indian Rupee settled on Wednesday -0.5% at 76.10 following dire Indian service sector activity data.
At 11:15 UTC, USD/INR is trading -0.3% at 75.85. This is at the lower end of the daily traded range as Indian currency market remains shut for Buddha Purnima and following better than forecast Chinese export data.
Chinese Exports Unexpectedly Jump
The Indian Rupee is advancing amid an improved risk tone in the markets, as economies across the globe start reopening and as Chinese export data impressed.
Chinese exports unexpectedly surged, increasing 3.5% on an annual basis, significantly higher than the -15.7% decline that analysts had forecast. This was the first increase in exports this year, as factories rushed to fill a backlog of orders after the lockdown restrictions eased.
China is India’s principal trading partner. Therefore, the health of the Chinese economy is paramount to the health of the Indian economy. However, it is worth noting that imports to China remain very weak suggesting the outlook for world’s second largest economy is still grim.
US Initial Claims Expected To Hit 3 Million
Whilst the US Dollar is trading lower versus the Indian Rupee, it is gaining ground against its major peers as investors look ahead to the release of US initial jobless claims data. Analysts forecast that 3 million more Americans will sign up for unemployment benefit for the week 1st May. This will bring the total to 33 million initial jobless claims across a 7-week period, as the coronavirus lockdown wreaks havoc on the US labour market.
The data will come following the release of the ADP Private payroll report on Wednesday. The data revealed that 20.2 million private sector jobs were lost in April. This was the worst drop ever recorded and double the number of private sector jobs lost in February 2009 in the Financial crisis.
However, this is only half the story. Tomorrow the US Labour department’s non-farm payroll will lay bare the full extent of job losses in America across April, whilst the US economy was locked down. A very weak reading could boost demand for the safe haven US Dollar.
