- Indian Rupee (INR) rebounds paring yesterday’s losses
- Government will reduce tax on petrol & diesel
- US Dollar (USD) extends gains versus major peers
- US non-farm payroll in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is heading lower on Friday paring gains from the previous session. The pair settled +0.13% higher on Thursday at 74.37. At 10:00 UTC, USD/INR trades -0.23% at 74.37. The pair is set to decline 0.7% across the week, its fourth straight week of declines.
India is expected to receive a big increase in revenue. Revenue collection for 2020/21 is expected to exceed the target of $207.77 billion, which would mark the first beat in four years.
The government also announced that it will reduce taxes on petrol and diesel in an attempt to improve consumer sentiment as the economy recovers from the pandemic lockdowns.
The announcement comes as oil prices traded at multi-year highs last month and remain elevated after OPEC+ group agreed to stick to the oil output increase agreed back in July. West Texas Intermediate trades 1% higher today
The US Dollar is trading lower versus the Rupee but higher versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.12% at the time of writing at 94.45 after jumping 0.5% in the previous session.
The US Dollar is extending gains ahead of the release of the closely watched US non-farm payrolls. The jobs data will be even more closely monitored than before after the Federal Reserve highlighted again that employment was a key factor for a rate hike.
Expectations are for 425,000 jobs to have been added in October after two months of disappointing jobs numbers. In September just 194,000 were added well short of the almost 500,000 expected.
The data comes after jobless claims yesterday dropped to a fresh post pandemic low of 269,000, beating forecasts of 277,000.
A strong non-farm payroll reading could boost bets of a Fed rate hike and lift the US Dollar.