- Indian Rupee (INR) is rising after losses yesterday
- The RBI left rates at 6.5%
- US Dollar (USD) falls versus its major peers
- US non-farm payroll data is due shortly
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after gains yesterday. The pair rose 0.12% in the previous session, settling on Thursday at 83.47. At 13:00 UTC, USD/INR trades -0.06% at 83.40 and trades in a range of 83.38 to 849.
The Indian rupee is edging higher after the Reserve Bank of India left interest rates unchanged as expected but raised its GDP grace for 2024-25.
The central bank now sees economic growth in the current fiscal year of 7.2%, upwardly revised from 7% previously, although it left its inflation forecast unchanged.
At the policy meeting, the RBI left the repo rate on hold at 6.5% for an eighth straight month, although two of the six MPC members voted for a 25-basis-point rate cut.
The Indian economy grew faster than expected in the January to March quarter; however, the recent national elections have rattled markets, and a weakened mandate could slow fiscal consolidation.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.05% at the time of writing at 104.04, after losses in the previous session.
The US dollar is holding steady as investors are cautiously anticipating the release of the US non-farm payroll data, which is due shortly.
Economists expect the US economy to add 185,000 jobs in May, up from 175,000 in April, which was the weakest month for job creation in six months.
Lead indicators this week have painted a mixed picture but could point to a modestly stronger-than-expected report. The ISM services hand manufacturing report employment subcomponents came in stronger, but the ADP payroll report was weaker, and jobless claims climbed.
The US non-farm payroll can be hard to predict; therefore, the market will also be watching the unemployment rate, which is expected to hold steady at 3.9%, and wage growth.
Signs of a cooling labor market, including low wage growth and easing price pressures, could encourage the Federal Reserve to cut interest rates sooner.
