• Indian Rupee (INR) strengthens after 4 days of losses
  • Manufacturing rebounded bur hiring slows
  • US Dollar (USD) falls despite strong data
  • US manufacturing PMI and consumer confidence beat forecast

The US Dollar Indian Rupee (USD/INR) exchange rate is heading higher paring some losses from the previous session. The pair settled -0.15% on Thursday at 74.16. At 15:30 UTC, USD/INR trades +0.07% higher at 74.21. The pair is set for weekly gains of 0.55%

Indian saw factory activity expanded in September as the economic recovery from the pandemic continued. However, firms reduced head count at the fastest pace since May.

The recovery could well continue for some months, supported by ultra-easy monetary policy and ongoing fiscal spending.

The manufacturing PMI rose to 53.7 in September, up from 52.3 in August, and staying above the 50 level which separates expansion from contraction. Improvements were seen both in domestic and overseas demand, which rose at a faster rate compared to August. Even so, the pick up failed to encourage firms to hire more workers.

The US Dollar is heading higher versus the Indian Rupee but lower versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.22% at the time of writing at 94.05 but continues to hover around its highest level in in almost a year.

The US Dollar is falling lower but is still set to book its strongest week of gains in six weeks. The Greenback traced treasury yields higher amid expectations that the Fed could start tightening monetary policy sooner than its peers as inflation remains stubbornly high. Fed Chair Powell acknowledged that inflation could remain elevated for longer than the Fed anticipated.

The US Dollar is inching lower despite a barrage of strong US data. The ISM manufacturing PMI showed that activity remained strong in the sector. The PMI came in at 61.1, up from 59.9 in August and defied expectations of a decline to 61.1.

Michigan consumer confidence data also came in stronger than forecast at 72.8, up from 70.3 forecast and beating expectations of a rise to 71.