- Indian Rupee (INR) strengthens for second day
- Indian GDP expected to expand in Oct – Dec 2020
- US Dollar (USD) falls as jobless claims jump unexpectedly
- FOMC minutes revealed the Fed’s holding its dovish stance
The US Dollar Indian Rupee (USD/INR) exchange rate is extending losses on Thursday for a second straight session. The pair settled -0.05% lower on Wednesday at 72.81. At 14:15 UTC, USD/INR trades -0.3% at 72.61.
Barclays is the latest bank to upwardly revise its growth forecast for India. The Chief India Economic at Barclays expects the Indian economy to return to modest growth in the October – December quarter after a record 23.9% contraction in the April – June quarter and a 7.5% contraction in the July – September quarter.
Barclays pointed out that growth at headline level is returning to normal. Manufacturing, industrial and agricultural sectors’ growth continues to outperform the service sector which is more vulnerable to pandemic restrictions and social distancing.
Barclays expects India’s economy to contract -6.5% this fiscal year and then grow 8.5% next fiscal year.
India’s GDP for the October – December quarter is due to be released on next Friday 26th February.
The US Dollar is trading lower across the board. The US Dollar Index which measures the greenback versus its major peers trades -0.4%, almost paring all of its 0.5% gains from the previous session.
US jobless claims unexpectedly jumped to 861,000, a four-week high as the US labour market recovery stumbles, despite covid cases falling. Economists had been expecting the number of Americans signing up for unemployment benefits to decline slightly from 793,000 the previous week to 765,000.
The data came following the latest FOMC meeting minutes which showed that the Fed was in no rush to start tapering support. Policy makers expect it to take time for the Fed’s goals of higher inflation and a stronger labour market to be reached.