- Indian Rupee (INR) showed resilience last week after services PMI data
- Indian equities are flat at the start of the week
- US Dollar (USD) falls versus major peers
- US CPI data is due on Friday
The US Dollar Indian Rupee (USD/INR) exchange rate is edging higher at the start of the week after trading flat last week. The pair gained 0% across last week, settling on Friday at 77.59. At 10:00 UTC, USD/INR trades +0.06% at 77.63.
The Rupee showed resilience versus the more robust US doll last week after data revealed that the dominant service sector grew at the fastest pace in eleven years in May, on the back of solid demand. The S&P Global India services PMI rose to 58.9 in May, up from 57.9 in April, beating forecasts of 57.5.
The data also highlighted surging inflation, with input prices rising at the sharpest rate in the survey’s history.
Today the Rupee is edging lower, with few catalysts driving the price. Domestic equities trade unchanged on the day.
The US Dollar is rising versus the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.28% at the time of writing at 101.86, after gains last week.
The USD gained ground last week after a better than expected US non-farm payroll report. The closely watched US jobs report revealed that 390,000 jobs were added in May. This was ahead of the 328,000 that analysts had expected. The unemployment rate held steady at 3.6%, and wages grew at 5.2% year on year.
The stronger than forecast jobs market raised expectations that the Federal Reserve may have to act more aggressively to raise interest rates in order to bring inflation back under control.
Today there is no high impacting US data. Instead, the general risk-on market mood is dragging on the safe-haven buck. Investors are looking ahead to the key US inflation data released at the end of the week. Any signs that peak inflation has passed could weigh on the USD.