- Indian Rupee (INR) rises after 4-days of losses
- India’s manufacturing PMI was 58.8 in April
- US Dollar (USD) falls versus its major peers.
- The Fed left rates unchanged and calmed rate hike fears
The US Dollar Indian Rupee (USD/INR) exchange rate is falling, snapping a four-day winning run. The pair rose 0.01% in the previous session, settling on Wednesday at 83.45. At 10:00 UTC, USD/INR trades -0.07% at 83.39 and trades in a range of 83.39 to 83.51.
Indian Rupee pushed higher after data showed that growth in India’s manufacturing sector remained strong in April thanks to solid demand.
The manufacturing PMI for India was 58.8 in April, down modestly from the 16-year high of 59.1 in March. Despite the modest softening, it was still well above its long-run average and remained above the 50 level, which separates expansion from contraction, for the 34th straight month.
Output and new orders eased from March but still recorded the second-best reading in over three years thanks to sturdy demand. Business optimism also improved with expectations of higher production volumes in the coming 12 months.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, trades -0.20% at the time of writing at 105.49, extending losses from the previous session.
The US dollar is falling for a second straight session as investors continue to consider the Federal Reserve’s interest rate decision ahead of tomorrow’s jobs report.
The US dollar fell yesterday and is extending those losses after the Federal Reserve left borrowing costs unchanged at 5.25 to 5.5%, in line with expectations.
Federal Reserve chair Jerome Powell gave mixed messages. On one hand, he reassured that the Fed was not looking to hike interest rates further despite sticky inflation. On the other hand, he warned that interest rates would remain high for longer.
Policymakers at the Federal Reserve have been concerned about the lack of further progress on cooling inflation in recent months. Inflation actually ticked higher across the first quarter of the year.
Still, the market interpreted the meeting as slightly more dovish than expected. As a result, the market now expects 35 basis points worth of rate cuts this year, up slightly from 29 basis points prior to the meeting.
Attention will now turn to US nonfarm payroll data, which is due to be released tomorrow and is expected to show that 243,000 jobs were added in April.
