- Indian consumer confidence hits all time low
- According to SBI GDP could contract at record pace of -1.5% this fiscal year
- US jobs report expected to reveal 8 million job losses in May
- At 11:30 UTC, USD/INR trades +0.3% at 75.65
The Indian Rupee is ignoring the risk on sentiment in the broader market and is heading lower on Friday, extending losses from the previous session. The Rupee settled on Thursday -0.18% at 75.45.
At 11:30 UTC USD/INR is trading +0.3% at 75.65 as Indian consumer confidence collapses. The pair has traded within a narrow range across the week and is set to conclude the week at approximately the same level that it started the week.
The Rupee is slipping as data revealed that consumer morale, in India, touched a historic low of 63.7% in May, down from 85.6% in March. Confidence has collapsed amid the on-gong coronavirus lock down which brought the Indian economy to a standstill.
According to a report by the Reserve Bank of India, the economic paralysis brought on by lockdown could result in the Indian economy contracting by -1.5% this fiscal year. This would be the worst recorded performance on record.
The US Dollar is trading broadly lower versus its peers, as investors remain optimistic, focusing on economic reopenings. Elevated risk sentiment is hitting demand for the traditional safe haven currency.
Attention will now turn to the release of the US Labour Department’s non-farm payroll jobs report. It comes at a time when investors are showing an extraordinary ability to shrug off astonishingly bad numbers.
Analysts are expecting 8 million jobs to have been lost across the month of May. A truly awful number. However, it is a vast improvement on the 25 million jobs lost in April. The unemployment rate is expected to jump to 19.5%, up from April’s 14.7%, a level last seen in the Great Depression of the 1930’s.
There is a possibility that the data could beat forecasts. The ADP private payroll report is considered a lead indicator for the non-farm payroll. The ADP report smashed expectations recording 2.7 million job losses against the 9 million forecast. However, even if the data surprises to the downside, there is a good chance that investors will shrug it off, as they have done with disappointing numbers across recent weeks.
