- Indian Rupee (INR) rises despite GDP downward revision
- Annual budget is due tomorrow
- US Dollar (USD) eases from 19 month high
- No US data is due today
The US Dollar Indian Rupee (USD/INR) exchange rate is moving lower on Monday after strong weekly gains last week. The pair gained 0.88% across last week, settling on Friday at 75.03. At 10:30 UTC, USD/INR trades -0.5%% at 74.66.
The Rupee is advancing despite GDP growth forecast to slow in 2022/23. India now expects its economy to grow by 8% to 8.5% for the fiscal year starting in April, down from 9.2% in the current year. The downward revision comes amid a spike in COVID cases in the country.
Despite a slowdown in growth expected, India will still retain the crown for fastest growing economy among major economies. Improving industrial production and farming suggests that the country is well positioned to face headwinds in the coming year.
The report comes ahead of the annual budget which will be released tomorrow.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades -0.2% at the time of writing at 97.07 after strong gains yesterday.
The US Dollar surged across last week on the back of strong US data and a more hawkish Federal Reserve. The Fed indicated that it would end its bond buying programme and raise interest rates in March. Furthermore, the central bank was looking to raise rates as many as 4 times this year, if not more.
Stronger than expected US economic growth and higher than forecast inflation supported the Fed’s more hawkish approach.
As the next week kicks off the US dollar has eased slightly as the market mood improved but the greenback continues to hover around 19-month highs.
Today there is no high impact US data so risk sentiment is likely to continue driving the US dollar. Tomorrow PMI data will be in focus ahead of the US non-farm payroll on Friday.