- Indian Rupee (INR) rises as risk sentiment improves
- GDP data expected to show 20% rebound YoY
- US Dollar (USD) resumes selloff
- US non-farm payroll on Friday in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a third straight session on Tuesday. The pair settled -0.24% in the previous session at 73.29. At 11:30 UTC, USD/INR trades -0.42% lower at 72.98.
The Indian Rupee is strengthening as domestic equities hit fresh all time highs and as attention turns to the latest Indian growth forecasts.
India’s economy is expected to have rebounded in the April – June quarter thanks for strong manufacturing and despite a second wave of COVID.
The Indian economy contracted -7.3% in 2020/21 owing to the first covid lockdown which lasted almost a year. The economy is not expected to have been as badly impacted by the second covid lockdown given that it was shorted and less stringent.
41 economists polled by Reuters forecast GDP growth of 20% ion the June quarters versus a 24.4% contraction in the same quarter a year earlier.
The US Dollar is trading lower across the board on Tuesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.22% at the time of writing at 92.65 after booking steep losses across the previous week.
The US Dollar resumed its sell off on Tuesday, falling to two-week lows amid ongoing weakness from Fed Powell’s Jackson Hole speech and as investors look ahead to Friday non farm payroll report.
After Federal Reserve Chair Jerome Powell failed to give a firm signal at the Jackson Hole Symposium on when the US central bank will start tapering asset purchases the US Dollar sold off. The Fed Chair also said that there was a way to go to maximum employment.
Attention now turns to the US labour market report on Friday for further clues as to when the Fed could consider starting to taper support. Payrolls are expected to increase by 750,000 after 943k,000 new jobs in July. A weaker report could cement the belief that that Fed will delay the tapering of bond purchases.