- Indian Rupee (INR) pauses from breath
- SBI forecasts 18.5% GDP in Q1FY22
- US Dollar (USD) licks its wounds after steep losses
- US PMIs show growth slowing
The US Dollar Indian Rupee (USD/INR) exchange rate is trending higher on Tuesday, paring losses from the previous session. The pair settled -0.3% lower on Monday after hitting 3 week-low. At 11:30 USD/INR trades +0.13% higher at 74.21.
The Rupee edging lower after strong gains at the start of the week. The Rupee slipped despite domestic equities reaching a record high. Indian shares soared to a record close with Bajaj Finserv leading the charge after the market regulator allowed the bank to set up a mutual fund.
Separately, according to the State Bank of India, India’s economy is expected to see growth in the region of 18.5% in the first quarter of the current financial year. This has been upwardly revised but remains below the Reserve Bank of India’s 21.4% growth forecast.
The US Dollar is edging higher across the board on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.04% at the time of writing at 92.99 after booking steep losses in the previous session.
The US Dollar is holding broadly steady on Tuesday following its steepest one-day selloff on Monday since May. The US Dollar fell out of favor as investors eased bets that Federal Reserve Chair Jerome Powell will use the Jackson Hole Symposium later this week as a platform to direct the markets towards a tapering of support later this year.
Bets of the Fed tightening monetary policy sooner rather than later are easing as COVID cases rise owing to the Delta variant.
PMI data released yesterday came in weaker than expected showing that the economic recovery in the US is slowing. The composite PMI which is considered a good gauge for business activity slowed to 55.4 in August down from 59.9.
On the data front US new home sales are expected to contract but at a slower pace of -2.7%.