- Indian Rupee (INR) falls after gains yesterday
- Indian inflation fell to a 12-month low
- US Dollar (USD) rises versus its major peers
- PPI inflation cooled, jobless claims rose
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after yesterday’s losses. The pair fell 0.11% in the previous session, settling on Wednesday at 83.45. At 17:00 UTC, USD/INR trades 0.08% at 83.54 and is in a range of 83.45 to 82.61.
The Indian rupee hands weakened on Thursday amid U.S. dollar demand from local oil companies and other importers.
Multiple market factors are currently driving the Indian rupee. However, foreign exchange intervention from the Reserve Bank of India could curb some of its declines for the time being.
Yesterday’s show data showed that Indian retail inflation eased to a 12-month low of 4.75% in May, down from 4.83% in April. This was softer than the market expected.
Separately, oil prices are set to rebound over 4% so far this week following three straight weeks of losses.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 0.5% at the time of writing at 104.87, after loses yesterday.
The US dollar is rising, recouping yesterday’s losses despite further signs of weakness in the US economy.
US wholesale inflation, as measured by the producer price index, dropped in May, adding to evidence that inflationary pressures are cooling.
The PPI, which tracks inflation before it reaches consumers, fell 0.2% month over month in May after rising 0.5% in April. The fall was due to a 7.1% drop in gasoline prices. This was the largest drop in producer prices since October.
Separately, US jobless claims also rose by the most in nine months, pointing to some weakness in the labor market. New applications for jobless benefits rose to 242,000 last week, up from 229,000 the previous week. The figure was ahead of the 225,000 that economists expected.
The data comes after the US non-farm payroll report showed that the unemployment rate rose to 4% last month. This is a level that was last seen two years ago and reflects people returning to the workforce but not finding jobs. Now, however, this remains subdued.
Still, the data comes after the Federal Reserve yesterday lowered rate cut expectations and projected just one rate cut this year, down from three rate cuts that were expected across the rest of 2024 back in the March meeting.
