- Indian Rupee (INR) falls as covid cases rise again
- Indian economy contracted 12% QoQ in June quarter
- US Dollar (USD) trades around 1 month low as taper bets ease
- US jobless claims, job cuts, factory orders & trade balance due
The US Dollar Indian Rupee (USD/INR) exchange rate is edging higher for a second straight session. The pair settled +0.07% higher in the previous session at 72.99. At 11:30 UTC, USD/INR trades +0.10% higher at 73.06.
The Rupee is trading under pressure amid rising covid jitters. New daily covid cases reachED a two -month high on Thursday with new infections hitting 47,092. With schools reopening and the September – November festival season beginning fears are rising that cases could start surging again.
The densely populated and worst effected state Kerala accounts for around 70% of new cases. The Indian Health minister Mansukh Mandaviya hinted towards travel restrictions to curb the spread.
The rise in cases come as the Indian economy continues to recover from the second wave of covid. The latest GDP reading revealed that the Indian economy grew a record 20.1% YoY in the June quarter after contracting 24% in the same quarter last year. However the quarter on quarter GDP print is more telling, revealing a 12% contraction amid the second covid wave.
The US Dollar is strengthening against the Rupee. However, it is falling against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.11% at the time of writing at 92.41 extending losses for a second session.
The greenback trades around one-month lows amid ongoing doubts over when the Federal Reserve will start tapering its bond buying programme. At the Jackson Hole meeting last Friday Fed Chair Powell said that the recovery in the jobs market would determine the timing of when the Fed starts to unwind its stimulus programme.
ADP employment data was significantly weaker than expected. Just 374,000 private sector jobs were added in August, this was well short of the 613,000 forecast.
Attention will now turn to a slew of US data due later today including US jobless claims, Challenger job cuts, factory orders and trade balance. These figures come ahead of tomorrow’s non-farm payrolls.