- Indian Rupee (INR) is rebounding
- Services PMI fell to a 5-month low
- US Dollar (USD) rises versus its major peers
- US services PMI jumped in May
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose 0.52% in the previous session, settling on Tuesday at 83.67. At 19:00 UTC, USD/INR trades -0.14% at 83.40 and trades in a range of 83.29 to 85.19.
The Indian Rupee is recovering after some selling pressure yesterday in the wake of the results from the Indian election, which showed that Prime Minister Narendra Modi’s party won by a smaller majority than expected.
On the data front, Indian service sector activity cooled by more than expected in May, with the PMI dropping to 60.2, down from 60.8, marking a 5-month low as new orders fell. However this was still the 34th straight month that the sector remained in expansionary territory. The data had little impact on the Rupee.
Instead, falling oil prices and optimism surrounding foreign fund inflows due to India’s inclusion in JP Morgan’s bond indices are supporting the Rupee.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.21% at the time of writing at 104.33 after a flat end yesterday.
The US dollar is rising against its major pairs after a mixed batch of data. Services business activity expanded at a faster pace than expected, offsetting weakness in the ADP private payroll.
The US services PMI rose to 53.8 in May, up from 49.5 in April, beating expectations of a more modest rise to 50.5. The level 50 separates expansion and contraction. New orders rose to 54, up from 52, as the sector continued to expand despite a slowdown in employment.
The data comes after manufacturing ISM data on Monday showed a second straight month of contraction.
Meanwhile, US ADP private payrolls also weakened by more than expected private payrolls, increasing by 152,000 in May, down from 188,000 in April. The data comes after jolts job openings to the lowest level in three years and ahead of Friday’s key nonfarm payroll report.