- Indian Rupee (INR) extends gains
- Nomura forecasts 9.9% GFDP growth 2021
- USD Dollar (USD) slips on risk outflows despite stimulus talks stalling
- US jobless claims in focus next
The US Dollar Indian Rupee (USD/INR) exchange rate continues its descent on Thursday, after pausing for breath in the previous session. The pair settled on Wednesday flat at 73.72 after losses at the start of the week. At 11:15 UTC, USD/INR trades -0.1% at 73.66.
The research and brokerage house Nomura has turned positive on the Indian economy. According to Nomura’s latest forecasts India could be the fastest growing Asian economy in 2021 with expectations of economic growth in the region of 9.9%, eclipsing China (9% forecast) and Singapore (7.5% forecast).
Nomura stated that they believe that India is on the cusp of a cyclical recovery. The upbeat outlook comes after two years of negative growth outlook for the country and comes following a sharper than expected recovery in India’s economy in the second quarter.
Nomura added that they expect the Reserve Bank of India to remain accommodative in the first half of 2021 calendar year followed by a gradual withdrawal of liquidity in the final six months of the 2021 calendar year.
Meanwhile the US Dollar is trading lower versus its major peers as risk sentiment holds up despite US stimulus talks stalling as reflected in +0.2% increase in S&P futures.
At the time of writing the US Dollar Index, which gauges the greenback against a basket of major currencies trades -0.05% lower at 91.05, mildly higher than its 2.5 year low of 90.47.
US fiscal stimulus talks between the Democrats and Republicans in Congress have once again stalled. Senate Majority Leader Mitch McConnel snubbed the White House’s latest $916 billion proposal. Congress is set to break for Christmas recess on 18th December meaning that time is running out to for a deal to be agreed.
Looking ahead US jobless claims data will be in focus. Initial claims are expected to rise to 725,000, up from 710,000 in the previous week as tighter lockdown restrictions across parts of the US start to reverse the recovery in the labour market.