• Indian Rupee (INR) holds steady after minor losses last week
  • China drip feed more stimulus
  • US Dollar (USD) falls versus major peers
  • Fed rate hike bets are tempered

The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady at the start of the week after booking losses across the previous week. The pair rose 0.03% last week, settling on Friday at 82.68. At 11:30 UTC, USD/INR trades +0.01% at 82.69 and trades in a range of 82.89 to 83.13.

The Indian Rupee is holding steady while Indian domestic equities push higher amid an upbeat market mood. News of additional China stimulus to support the property sector and the IT sector is helping the mood, as well as news that China’s Country Gardens has received approval from its bondholders to extend its debt deadlines.

The US dollar is flat against the Rupee but falling against major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.18% at the time of writing at 104.05, giving back gains from last week.

The US dollar is falling on Monday as investors reign in their expectations for more rate hikes from the Federal Reserve.

After Friday’s jobs report the markets now believe that there is less chance of another rate hike by the Federal Reserve before the end of the year. The data shows that whilst job creation grew, unemployment was also higher, and wage growth cooled. The data points to decreasing inflationary pressures and a possibility that the US economy could avoid a recession.

According to the CME MarketWatch, the market is now pricing in a 90% probability that the Fed won’t hike rates in September and a 62% probability that the Fed won’t hike in November either. This is up from 50% a week earlier.

Looking ahead, today is a US public holiday so trading volumes are expected to be light and there is no major data due to be released. Later in the week Federal Reserve speakers will be very much under the spotlight with seven officials set to hit the airwaves between now and Friday.