- Indian Rupee (INR) rises, boosted by index inclusion
- Higher oil prices could limit gains
- US Dollar (USD) is falling against its major peers
- Continuous claims rise to a multi-year high
The US Dollar Indian Rupee (USD/INR) exchange rate is falling after yesterday’s gains. The pair rose 0.19% in the previous session, settling on Wednesday at 83.56. At 20:00 UTC, USD/INR trades -0.15% at 83.58 and is in a range of 83.41 to 83.59.
The Indian Rupee is recovering from yesterday’s losses ahead of its inclusion in the JP Morgan emerging market bond index as of tomorrow. Demand has already been strong and is expected to continue growing.
Meanwhile, rising oil prices have limited the Rupee’s upside. Oil trades at a two-month high as escalating geopolitical tensions in the Middle East overshadow an unexpected build in US inventories.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.19% at the time of writing at 105.88, marking its second day of gains.
The US dollar is falling after jobless claims data shows signs of a weakening labour market
While initial jobless claims fell to 233K, down from 236K, continuing jobless claims were at their highest level since the end of 2021. This tells us that Americans who are receiving unemployment benefits are finding it more challenging to get re-employed.
Meanwhile, Q1 GDP data show that the US economy grew 1.4% annualised in Q1, up from the earlier reading of 1.3%. Meanwhile, core PCE across the first quarter was also hotter than earlier readings and was revised higher to 3.7% from 3.6%, highlighting the sticky nature of inflation.
However, with the jobs market starting to show signs of cooling and delinquencies on the rise, the US economy could be on the brink of slowing down.
Attention will now turn to US core PCE data, which is due to be released tomorrow and is the Federal Reserve’s preferred gauge for inflation. Expectations are for inflation to cool to 2.6% annually, down from 2.8%. On a monthly basis, core PCE is set to rise 0.1% after rising 0.3% in the previous session.
