- Indian Rupee (INR) rises for a second day
- RBI left rates unchanged
- US Dollar (USD) falls for the third straight day
- US non-farm payroll report
The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a second straight day. The pair fell -0.06% in the previous session, settling on Thursday at 83.20. At 10:30 UTC, USD/INR trades -0.01% at 83.19 and trades in a range of 83.17 to 83.34. The pair is set to rise across the week by 0.2%.
The Reserve Bank of India has voted to keep interest rates on hold for a fourth straight meeting, in line with expectations. However, the central bank did signal that it would keep interest rates high and liquidity tight in order to bring inflation back towards its 4% target.
The Monetary Policy Committee kept rates unchanged at 6.5% after raising the rate by 250 basis points since May 2020 in a bid to cool prices.
The central bank said that a move to a more neutral policy stance will only be considered when inflation aligns with the target in a more consistent manner.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.06% at the time of writing at 106.30, falling for a third straight day.
The US dollar is falling against its major pairs for a third straight session as investors look ahead cautiously to U.S. jobs data.
The closely watched nonfarm payroll report is expected to show that 170,000 jobs were added in September this was down slightly from 187,000 in August.
Meanwhile, the unemployment rate is expected to take lower to 3.7%, down from 3.8%, and average weekly earnings are expected to rise by 0.3% after rising 0.2% in the previous month.
The non-farm payroll is a notoriously volatile report, and the lead indicators this week have been very mixed. On the one hand, the ADP private payroll report came in well short of expectations, suggesting that we may have a weaker U S nonfarm payroll report.
However, JOLTS jobs openings and the US jobless claims indicate that the number farm payroll report could indeed be stronger than expected.
Either way, the port will be pivotal. A stronger report would support another rate hike from the Federal Reserve. Meanwhile, any weakness in the report could see investors reign in hawkish fed bets and could trigger a corrective decline in the US dollar.
