- Indian Rupee (INR) builds on gains
- 11% growth for coming year expected
- US Dollar (USD) slips after PCE rises
- US consumer confidence up next
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower on Friday extending losses for a second d straight session. The pair settled -0.2% at 72.92. At 13:30 UTC, USD/INR trades -0.1% at 72.85
India announced that it expects a rebound in economic growth of 11% for the coming fiscal year in its annual economic survey following a huge vaccination programme and a rebound in consumer demand.
Earlier in the week the International Monetary Fund said that it expected the Indian economy to contract -7.7% in the current fiscal year to March 31st in its worst annual performance in 40 years.
The projections of 11% growth form the basis for the key figures in the Federal Budge due to be announced on Monday 1st February.
India’s government has promised game changing plans to boost economic growth in the 2021/22 budget. Areas such as healthcare spending, a privatization drive and import duty are expected to be in focus. However, this year’s Budget will be a much tougher balancing act than most years in light of covid.
The US Dollar is trading marginally lower versus its major peers after advancing in early trade. The US Dollar Index (DXY)which measures the greenback versus 6 major peers trades -0.07% at 90.41.
US Personal Expenditure Price Index (PCE) the Federal Reserve’s preferred measure of inflation edged higher to 1.3% from 1.1% in November. On a monthly basis the PCE index rose 0.4% from 0%. More importantly, the core PCE rose to 1.5%, up from 1.3%.
The data come following US Q4 GDP which printed inline with expectations. The US economy grew 4% in the final three months of the year, in-line with expectations.
Attention will now turn to Michigan consumer confidence. Investors will be keen to see how confidence is holding up as the labour market shows signs of strain.
