- India records over 78,000 new infections in 24 hours but pressure remains to keep economy open
- Manufacturing data yesterday showed sector starting to expand after 5 months of contraction
- US Dollar (USD) rises versus its peers amid optimism surrounding economic recovery
- US ADP report expected to reveal 950,000 new private sector hires in August
The US Dollar Indian Rupee (USD/INR) exchange rate is trading higher on Wednesday, paring losses from the previous session. The pair settled on Tuesday -0.3% at 73.00 after briefly touching 72.75, a level last seen in March. At 11:30 UTC, USD/INR trades +0.25% at 73.19.
The Indian Rupee is coming under strain as the number of coronavirus cases in the country continues to rise exponentially. Indian recorded over 78,000 new cases over the past 24 hours, taking the total number of infections to 3.7 million. India trails the US and Brazil with total cases. However, given the current trend in Indian that is set to change in the coming days.
India went into lockdown in early March when there were just 100 new cases a day. GDP for the April – June period showed a -25% contraction which was worse than what analysts had expected. Pressure has now been increasing on Prime Minister Narendra Modi to kick start economic growth despite soaring covid cases.
Data yesterday showed that India’s manufacturing output was expanding for the first time in 5 months. The manufacturing PMI struck 52 in August up from 46 in July whereby the figure 50 separates expansion from contraction. As businesses reopened after lockdown, demand has started to rise boosting new orders and output.
Investors will now look ahead to service sector data which is due tomorrow.
The US Dollar is pushing higher following stronger than forecast manufacturing data on Tuesday and as investors anticipate upbeat jobs numbers today. Investors are looking ahead to the US ADP private payroll report. Analysts are expecting to see 950,000 new jobs created in the private sector in August. This would be a substantial increase from just 167,000 in July. As strong reading would bode well for the closely watched US non farm payroll report due on Friday