- Indian Rupee (INR) falls despite services activity rising
- Indian services PMI jumped to 57.9
- US Dollar (USD) rebounds firmly after losses yesterday
- US non-farm payroll data due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is rising on Thursday after four days of gains. The pair settled -0.6% lower on Wednesday at 76.02. At 17:00 UTC, USD/INR trades +0.7% at 76.55.
Activity in India’s dominant services sector grew at its fastest pace in five years in April thanks to surging demand which drove companies to add workers for the first time since November. However, surging inflation remains a concern.
The S&P Global India services PMI rose to 57.9 in April, up from 53.6 in March and well above the expected 54 level. The level 50 separates expansion from contraction.
Delving deeper into the numbers new business rose to a five-month high as COVID restrictions eased, however, new export business fell sat the fastest pace in seven months amid concerns over the Russian war.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +1.3% at the time of writing at 103.85, rebounding from, losses of 0.85% in the previous session.
The US dollar fell to a one-week low in the previous session after the Federal Reserve Chair Jerome Powell poured cold water on the prospect of a 75 basis point rate hike in the coming meetings. The Fed raised interest rates by 50 basis points as was widely expected and marked the largest rate hike in 22 years. The Fed also started quantitative tightening in order to trim its balance sheet which grew to $9 trillion through the pandemic.
Today the US dollar is rebounding as it would appear that with inflation at 8.5% the market doesn’t believe that the Fed won’t hike by 75 basis points.
US initial jobless claims rose by more than expected last week to 200,000, up from 180,000 the previous week.
There is no more high impacting data due today instead attention will turn toward tomorrow’s US non-farm payroll data tomorrow.
