- Indian Rupee (INR) falls after gains last week
- India’s manufacturing PMI rose to 58.3 in June
- US Dollar (USD) is falling against its major peers
- ISM manufacturing PMI contracted at a faster pace
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after losses last week. The pair fell -0.24% in the previous week, settling on Friday at 83.35. At 20:00 UTC, USD/INR trades 0.1% at 83.45 and is in a range of 83.35 to 83.51.
The Indian rupee is falling despite activity in India’s manufacturing sector rebounding in June as output increased and hiring rose at the fastest pace in 19 years.
Strong growth and robust demand led to the rebound, which is helping Asia’s third-largest economy be one of the fastest-growing major economies.
The HSBC final Indian manufacturing PMI compiled by S&P Global rose to 58.3 in June. This was marginally below the preliminary reading of 58.5 but up from a three-month low of 57.5 in May.
The sector’s outlook remains positive, and upbeat demand lifted the new orders subsection. Meanwhile, larger workloads generated more jobs, and hiring rose for a fourth straight month.
The US Dollar is rising against the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.05% at the time of writing at 105.82, after four straight weeks of gains.
The US dollar is edging lower against its major pairs, extending losses from the end of last week after weaker-than-expected manufacturing data, which came following cooler inflation figures on Friday.
The manufacturing at the ISM manufacturing PMI failed to pick up as expected in June and slowed a tad further to 48.5. This was down from 48.7 in May and short of the 49.1 level that economists had forecast.
The data show that economic activity in the manufacturing sector contracted for the third straight month and the 19th time over the last 20 months.
Diving deeper into the figures, the employment component contracted in June, falling to 49.3 from 51.1, and the manufacturing prices paid also eased significantly to 52.1 from 57.
The data comes after the US core PCE the Fed’s preferred gauge for inflation, fell to its lowest level in three years, raising expectations that the Federal Reserve could cut interest rates sooner.
Looking ahead, attention will be on Federal Reserve chair Jerome Powell tomorrow, who is due to speak at the European Central Bank central bank forum in Centra Portugal.
