- Indian Rupee (INR) rises after RBI left rates
- India’s growth is expected to remain solid
- US Dollar (USD) rises against its major peers
- US non-farm payroll beat forecasts
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 Thursday at 83.34. At 17:00 UTC, USD/INR trades -0.17% at 83.33 and trades in a range of 83.25 to 83.50.
The Indian rupee is rising higher after the Reserve Bank of India left rates on hold for a seventh straight month.
The central bank kept the main lending rate at 6.5%, in line with forecasts, as economic growth is expected to remain solid and inflation above the 4% target.
The RBI believes that monetary policy must remain actively disinflationary at this stage. However, food price volatility was highlighted as a concern even though core inflation has fallen sharply below 4%.
The rupee rose following the decision and remained just above a record low on Thursday.
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 +0.13% at the time of writing at 104.26 but is on track to book a modest loss across the week.
The US dollar is moving higher against its major peers after stronger-than-expected US nonfarm payroll data shows that the Federal Reserve can afford to be patient with cutting interest rates.
According to data from the Labour Department’s Bureau of Statistics, the US added 303,000 jobs in March. This was well ahead of the 200,000 that analysts had forecast. Ann came after a downwardly revised 270,000 in February.
Meanwhile, the unemployment rate unexpectedly ticked lower to 3.8%, down from 3.9%, and wage growth also rose 0.3%, up from 0.1%.
Data highlighted the resilience of the US labour market. The Federal Reserve may struggle to cut interest rates in June following such a strong number, especially if inflation next week remains sticky.
According to the CME Fed Watch, the market is now pricing in a 55% probability of a rate cut in June, down from around 70% just a month ago.
