- Indian Rupee (INR) falls despite a record high on equities
- Bullish sentiment rises towards the Ruppe
- US Dollar (USD) falls after Jerome Powell’s testimony
- US jobs data is in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after two days of losses. The pair fell -0.13% in the previous session, settling on Wednesday at 82.70. At 10:00 UTC, USD/INR trades +0.03% at 82.80 and trades in a range of 82.74 to 82.84.
The Indian Rupee is easing even though bullish sentiment towards the currency at an almost two-year high. Meanwhile, investors maintain bearish positions across most other Asian currencies owing to the uncertainty of China’s economic recovery.
Increased inflows follow the inclusion of the Indian government bonds in debt indices coupled with large foreign exchange reserves, which have boosted the outlook for the Indian Rupee, at least in the near term.
Meanwhile, Indian shares are easing back after reaching fresh record highs on the open today.
The US Dollar is rising against the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.18% at the time of writing at 103.21, marking the fifth straight day of losses.
The U.S. dollar is falling for a fifth straight day as investors continue digesting comments from Federal Reserve chair Jerome Powell yesterday and after weaker jobs data ahead of Friday’s non-farm payroll.
Jerome Powell testified before Congress on Wednesday and confirmed that the central bank is looking to cut rates in 2024. However, he left little in the way of clues surrounding when that first rate cut could be and the scale of the rate cuts that the Fed is looking towards.
He did warn that inflation remained sticky, giving mixed messages to the market.
His comments were followed by a warning from Minneapolis Fed President Neel Kashkari. He said he only sees one or two rate cuts this year; however, his comments have failed to stem the dollar’s sell-off.
ADP payrolls also came in at 140,000, slightly weaker than expected, but up from 107 thousand in January. Job openings also cooled.
Attention now turns to Jerome Powell’s testimony before the Senate; however, he is expected to reiterate yesterday’s comments.
The US non-farm payroll report on Friday will be the next key driver.
