- Indian Rupee (INR) falls as manufacturing expands at slower pace
- Indian economy rebounded 20.1% YoY in June quarter
- US Dollar (USD) trades near 3 week lows after weak consumer sentiment data
- US ADP payrolls & ISM manufacturing in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is on the rise snapping a three day losing run. The pair settled -0.47% in the previous session at 72.94. At 11:30 UTC, USD/INR trades +0.18% higher at 73.07.
The Rupee trades under pressure following disappointing manufacturing data. Indian factory growth expanded at a slower pace in August after a brief recovery in July following the second wave of covid.
The manufacturing PMI fell to 52.3 in August after reaching 55.2 in July, a three-month high. However, the index remained above 50, the level which separates expansion from contraction.
The data comes a day after figures revealed that India’s economy grew at a record pace of 20.1% annually in the June quarter as the economy bounced back from the latest covid wave. This was up strongly from 1.6% year on year recorded in the March quarter.
The US Dollar is strengthening against the Rupee. However, it is treading water against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.02% at the time of writing at 92.68 after trading flat in the previous session as well.
The greenback continues to hover around 3-week lows as investors digest weaker than expected consumer confidence data and ahead of Friday’s non-farm payroll numbers.
Data yesterday revealed that US consumer confidence slumped to a six-month low as rising covid cases dampened the economic outlook. The Conference Board revealed that consumers were less likely to buy big ticket items over the coming six months supporting the view that consumer spending is likely to cool in the third quarter after two strong quarters of spending.
Attention will remain on the economic calendar with the release of ADP private payrolls and ISM manufacturing PMI. These figures will be watched closely and could provide clues over the health of the labour market ahead of Friday’s non-farm payrolls.