- Indian Rupee (INR) falls for a fourth day
- Indian composite PMI rises for a 32nd month
- US Dollar (USD) rises versus its major peers
- US inflation was hotter than expected
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a fourth straight day. The pair rose 0.06% in the previous session, settling on Wednesday at 83.05. At 11:00 UTC, USD/INR trades +0.08% at 83.11 and trades in a range of 82.95 to 83.15.
Indian business activity ended this fiscal year on a positive note, growing at its fastest rate in eight months in March, indicating that the country could be on track to remain the fastest-growing major economy.
HSBC’s flash India composite PMI, compiled by S&P global, rose to 61.3 in March up from 60.6 in February. This marks the 32nd straight month of expanding activity, with the 50 level separating expansion from contraction.
Manufacturing output at an almost 3-1/2-year high was a principal driver of business activities, and new orders increased at a faster pace than the previous month. The manufacturing PMI rose to 59.2, its highest level since February 2008, up from 56.9 last month.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.17% at the time of writing at 103.40 as it attempts to recover some of yesterday’s losses.
The US dollar is rising, recovering from steep losses yesterday after the Federal Reserve left interest rate on hold at 5.25 to 5.5% in line with expectations.
However, the central bank also surprised the market by maintaining guidance for three rate cuts this year despite Inflation coming in hotter than expected for the previous two months.
The market had been expecting a slightly more hawkish tilt from the Federal Reserve – this wasn’t the case as policymakers continue to plan to shave 75 basis points off the current rate level by the end of 2024. The market is also pricing in adding a 75% probability of the 1st Fed rate cut coming In June; this is up from 60% just prior to the meeting.
Looking ahead, attention now turns to US PMI data, which is expected to show that growth in the service and manufacturing sectors slowed slightly in the month of March. Weaker-than-expected readings, kids, and to confidence, a more dovish central bank.
