- Indian Rupee (INR) gains after small losses yesterday
- India services PMI eases to 60.6 from 61.8
- US Dollar (USD) falls for a third straight day
- US ISM services grow at a slower pace
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose +0.08% in the previous session, settling on Monday at 82.91. At 14:00 UTC, USD/INR trades -0.03% at 82.88 and trades in a range of 82.69 to 83.00.
The Indian Rupee is pushing higher after Indian service sector activity remains robust and continues to accelerate in February, although at a slightly slower pace.
The services PMI fell to 60.6 in February, down from January’s 6-month high of 61.8. This was weaker than the 62 level that economists had penciled in but remains well above the 50 mark that separates growth from contraction.
Firms got some relief from inflationary pressures as operating costs rose at the weakest pace since December.
The services data comes as Indian retail inflation touched a three-month low in January and is expected to remain within the Reserve Bank of India’s 2 to 6% target over the coming months.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.03% at the time of writing at 103.80, marking the third straight day of losses.
The US dollar is holding steady after the ISM services PMI cooled by more than expected, and investors are waiting cautiously on the sidelines ahead of Federal Reserve chair Jerome Powell’s testimony before Congress tomorrow.
ISM services PMI slips to 52.6 in February, down from 53.7 in January, which was a steeper fall than economists had forecast. Expectations had been for a decline to 53.
However did mark the 14th consecutive month that the services PMI has registered growth which is a level over the 50. Delving deeper into the numbers, prices continued to tread higher, which will be a worry for the Federal Reserve, although prices had cooled slightly from the 64% increase in January to a 58.6% increase in February.
Attention is now on Federal Reserve chair Jerome Powell, who is expected to speak tomorrow and could reiterate the need for the Federal Reserve to see more data and more evidence that inflation is cooling towards the 2% target.
