- Indian Rupee (INR) falls after 5 days of gains
- World Bank forecasts 6.6% growth in the coming fiscal year
- US Dollar (USD) rises after Powell’s speech
- US CPI data is due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after five days of declines. The pair settled -0.7% lower on Tuesday at 81.60. At 14:00 UTC, USD/INR trades +0.12% at 81.70, trading a range of 81.50 to 81.81.
The World Bank expects India’s economy to grow at a slower pace of 6.6% in the next fiscal year, down from 6.9% in this current year. The World Bank cited a slowdown in the global economy and increasing uncertainty which will weigh on export and investment growth.
Even so India is expected to be the fastest-growing economy among the seven largest emerging markets and developing economies. However, after the fiscal year end in March 2024, growth in India is likely to slip back to just over 6%.
On a global scale, the World Bank is forecasting a sharp slowdown in growth to 1.7% in 2023. this is down from 3% forecast just six months ago.
The US Dollar is rising across the board The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.09% at the time of writing at 103.33, adding to gains yesterday.
The US dollar is pushing higher for a second straight session finding support from comments from Federal Reserve Chair Jerome Powell. Yesterday, Powell said that the central bank might have to make unpopular decisions in order to rein in inflation. His comments come after two Federal Reserve officials earlier in the week indicated that interest rates would need to rise above 5% and stay there for some time in order to bring inflation down.
There is no high impact in U.S. economic data today instead attention is firmly on tomorrow’s inflation report which is expected to show that consumer prices continued to fall in December. US CPI is expected to drop to 6.5% YoY in December, down from 7.1% in October as higher interest rates stem demand and tackle inflation.