- Indian Rupee (INR) falls for a third day
- The outlook for the Rupee is weak despite Indian growth
- US Dollar (USD) rises against major peers
- Fed Chair Jerome Powell to speak
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a third straight session. The pair rose +0.02% in the previous session, settling on Tuesday at 83.23. At 11:00 UTC, USD/INR trades +0.07% at 83.28 and trades in a range of 83.21 to 83.31.
The rupee is falling and is forecast to trade close to record lows against the dollar across the coming months, according to forex analysts. FX specialists say they see the Reserve Bank of India being less likely to intervene to support the Rupee in the coming year.
India’s economy is forecast to grow 6.3% this fiscal year, making it the fastest-growing major economy in the world. However, the Rupee, trades near record lows, is not reflecting the same optimism and has fallen 0.6% this year. However, thanks to regular RBI intervention, this is better than most of its Asian peers.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.18% at the time of writing at 105.75, rising for a third straight day.
The U.S. dollar is pushing higher For a third straight day despite Friday’s weaker-than-expected U.S. jobs data.
This week has seen a marked shift in tone towards the greenback as the Federal Reserve pushes back on the more dovish tone from last week.
The Fed was perceived to have adopted a more dovish stance in last week’s FOMC meeting, which was then supported by a weaker-than-expected October nonfarm payroll report. As a result of the market priced out another rate hike this year and considered more rate cuts by the Fed in 2024.
This week, Federal Reserve officials have adopted a more hawkish tone, with Federal Reserve governor Michelle Bowman and Minneapolis Fed president Neel Kashkari both saying that they would support another rate hike should inflation prove to be sticky and owing to the resilience of US economy.
All eyes are now on Federal Reserve chair Jerome Powell, who is due to speak later today. Investors will be watching his comments very carefully for clues over the future path of interest rate hikes.
