- Indian Rupee (INR) rises, extending gains from last week
- Indian target inflation is expected to stay within target range
- US Dollar (USD) falls after earlier gains
- US treasury yields falls away from 5%
The US Dollar Indian Rupee (USD/INR) exchange rate is falling, extending losses from last week. The pair fell -0.17% in the previous week, settling on Friday at 83.15. At 17:30 UTC, USD/INR trades -0.08% at 83.09 and trades in a range of 83.07 to 83.19.
Upbeat comments from the Government have supported the Indian Rupee. The finance ministry said India’s fiscal position remains solid with steady revenue growth, and inflation will likely remain within the target band.
The finance ministry said that revenue generated from taxes has steadily gained pace and pointed to strength in the underlying economic activity. India targets a fiscal deficit of 5.9% of GDP for the financial year ending March 2024.
Many analysts believe India will be the fastest-growing major economy this fiscal year thanks to government spending ahead of its general election in May next year.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.39% at the time of writing at 105.77, extending losses from last week.
After starting the day on the front foot, the US dollar is edging lower against a basket of currencies, tracking U S treasury yields lower. The US treasury yield briefly reached above 5% before retreating lower.
U.S. Treasury yields have been in focus after breaching the 5% level on Friday, and investors continued to digest the comments from Federal Reserve chair Jerome Powell, who said that the strength of the US economy and tightness in the labour market could mean that interest rates need to rise higher.
The surge in U S treasury yields since mid-July has lifted the US dollar more than 6% over the past few months. There was no high impacting U.S. economic data today, just the Chicago fed national activity index, which came in at 0.2, up considerably from 0.22 in August.
This week is a key week for data with the release of US Q3 GDP data and core CPI at which is the Federal Reserve’s preferred inflation gauge.
