- Indian Rupee (INR) is rising after losses last week
- RBI left rates unchanged
- US Dollar (USD) rises after a stronger jobs report
- US inflation data is due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after gains last week. The pair rose 0.2% in the previous week, settling on Monday at 83.42. At 12:00 UTC, USD/INR trades -0.07% at 83.37 and trades in a range of 83.36 to 83.44.
The Indian Rupee is edging lower after the Reserve Bank of India (RBI) left the interest rate unchanged on Friday but raised its fiscal year growth forecast on the back of a robust economy.
The RBI now expects the economy to expand by 7% in the current fiscal year up from 6.5%, owing to stronger-than-expected growth in the July to September quarter.
However, the outlook for inflation is uncertain, prompting the central bank’s management Policy Committee to keep the repo rate unchanged at 6.5% for a fifth straight meeting.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.04% at the time of writing at 104.03, after gains last week.
The US dollar is pushing higher, extending gains from last week after the US nonfarm payroll came in stronger than expected.
The closely watched U S jobs report showed that payrolls rose by 199,000 in November, up from 150,000 in October and ahead of estimates of 180,00.
Meanwhile, the unemployment rate unexpectedly dropped to 3.7% whilst economists had expected unemployment to hold steady at 3.9%. Average hourly earnings, a key indicator for inflation, rose by 0.4% month on month and 4% compared to a year ago. This was close to expectations.
The data highlights the resilience of the US labor market despite aggressive interest rate hikes by the Federal Reserve.
The data comes ahead of tomorrow’s inflation figures which are expected to show a slight cooling in inflation two 3.1%. The data also comes ahead of Wednesday’s Federal Reserve interest rate decision, where the Fed is expected to leave interest rates on hold at 5.25 to 5.5%.
