- Indian Rupee (INR) falls on central bank divergence
- Indian industrial production due
- US Dollar (USD) falls rises after strong jobless claims data
- US CPI data expected to hit almost 40 year high
The US Dollar Indian Rupee (USD/INR) exchange rate is moving higher on Friday for a second straight session. The pair settled +0.3% on Thursday at 75.58. The pair is set to gain 0.65% across the week. At 10:00 UTC, USD/INR trades +0.16% at 75.70.
The Rupee trades under pressure at an 18 month low on central bank divergence. The Federal Reserve is keen to tighten monetary policy whilst the Reserve Bank of India is showing no signs of raising interest rates soon.
Interestingly the RBI is not stepping up intervention to stem the Rupee’s fall either.
Looking ahead attention will be on Indian industrial production data which is due to be released shortly. Industrial output is expected to rise to 4% year on year in October up from 3.1% in September.
The US Dollar is trading higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.06% at the time of writing at 96.33 adding to gains from the previous session.
The US Dollar is gained in the previous session after stronger than expected US jobless claims data. The data showed that initial claims fell to 184,000, the lowest level since 1952 as the recovery in the labour market continues.
Earlier in the week the JOLTS job openings data revealed that there were 11 million unfilled vacancies in the US.
Attention is now turning to towards the release of US inflation data, as measured by the consumer price index. The CPI is expected to rise to 6.8% in November an almost 40-year high, up from 6.2% in October. A strong reading could prompt expectations that the Fed will move sooner to raise interest rates. The next Fed meeting is next week and the Fed is widely expected to accelerate the pace at which it tapers its bond purchases.