• Indian Rupee (INR) rises for a second day
  • India’s account deficit narrowed in the October – December quarter
  • US Dollar (USD) falls versus major peers
  • US durable goods rise

The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a second straight day. The pair fell 0.2% in the previous session, settling on Monday at 83.41. At 17:00 UTC, USD/INR trades -0.11% at 83.32 and trades in a range of 83.27 to 83.50.

The Rupee rose as India’s current account deficit narrowed from October to December thanks to higher services exports.

The current account deficit was $10.5 billion, equivalent to 1.2% of GDP in the third quarter of the fiscal 2023/24. This was down from 1.3% of GDP in the previous quarter.

The deficit stood at $16.8 billion or 2% in the same quarter a year earlier. Services exports increased 5.2% year on year thanks to rising exports of software businesses and travel services.

The US Dollar is falling against the Rupee but rising against major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.17% at the time of writing at 104.29, after falling in the previous session.

The U.S. dollar is ticking lower for a second straight day as investors continue to book profits following last week’s monthly high and amid caution ahead of Friday’s inflation data.

Overnight, Fed speakers provided mixed messages about the outlook for interest rates. Fed president Raphael Bostic reiterated that he only saw the Fed cutting interest rates once in 2024. This was below the three interest rate cuts that the Federal Reserve guided for in last week’s meeting.

However, Austin Goolsbee adopted a similar tone to the Federal Reserve meeting, indicating that he believes three interest rate cuts this year were possible.

Investors will look to Friday’s US core PCE inflation data for further clues about the Federal Reserve’s possible path for interest rates.

In the meantime, data today supported the view of a resilient U.S. economy, as durable goods orders rose 1.4%.