- Indian Rupee (INR) falls after solid gains last week
- GS cuts its China growth forecast
- US Dollar (USD) rises versus major peers
- Fed Chair Powell will testify next week
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after falling across last week. The pair fell 0.64% in the previous week, settling on Friday at 81.91. At 12:15 UTC, USD/INR trades +0.03% at 81.94 and trades in a range of 81.89 to 82.00.
The Rupee is falling, along with other Asian currencies, amid rising concerns over the health of the Chinese economy.
Investment bank Goldman Sachs can’t China’s GDP growth forecast for this year to 5.4%, down from 6%. Goldman Sachs is the latest string of major banks which have slashed their growth forecasts for the world’s second-largest economy.
Goldman Sachs cited concerns over weak confidence and the under-pressure property sector for the downgrade.
The move comes after the People Bank of China has cut interest rates several times in recent weeks and is expected to cut the primary loan rate again tomorrow,
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades + 0.22% at the time of writing at 102.46, after losses last week.
The US dollar Is pushing higher after hitting one month low in the previous week, amid a risk-off mood in the market and in quiet trade owing to a US public holiday for Juneteenth day.
The USD fell sharply in the previous week after the Federal Reserve skipped a rate hike in the June meeting, and the market became increasingly optimistic that the central bank could be nearing the end of its rate-hiking cycle, despite policymakers signaling that peak rate is expected to be higher at 5.6%, up from a previously expected 5.1%.
Attention is now turning to Federal Reserve Chair Powell’s testimony before Congress later this week. In his bi-annual testimony, Powell is expected to stick to similar messaging to last week’s press conference. A less hawkish tone could see the USD slip further.
