- Indian Rupee (INR) is falling, tracking equities lower
- Indian services activity eased to a 10-month low
- US Dollar (USD) rises versus its major peers
- US NFP smashed forecasts
The US Dollar Indian Rupee (USD/INR) exchange rate rose further on Friday, extending gains from the previous session. The pair rose 0.08% in the previous session, settling on Thursday at 83.99. On Friday, it settled up 0.05% at 84.03 and traded in a range of 83.94 to 84.05.
The rupee is falling on safe-haven outflows, and Indian shares posted the worst week in over two years amid concerns over the deepening conflict in the Middle East. The nifty 50 index fell 0.93% on Friday and the S&P Sensex dropped 0.98%. Both benchmarks last about 4.5% each for the week, the worst since June 2022.
Meanwhile, data from India was more encouraging, with the services sector activity still showing robust growth Louise to a 10-month low. The services PMI index fell to 57.7 in September from a 5-month high of 60.9 in August. This was also below the preliminary estimate of 58.9.
The US Dollar rose across the board on Friday. The US Dollar Index, which measures the greenback versus a basket of major currencies, closed +0.52% at 102.52, marking the sixth day of gains.
The US dollar rose strongly on Friday and gained across the week after a stronger-than-expected US nonfarm payroll report, which points to a resilient U.S. jobs market.
In September, 254,000 jobs were created, marking the most in six months. The previous two months were upwardly revised to a total of 72,000.
The unemployment rate eased to 4.1%, defying expectations of unemployment remaining unchanged at 4.2%. Meanwhile, average hourly earnings increased by 0.4% month over month and 4% year over year, matching the best month since March.
The strong data reduces the odds that the Federal Reserve will opt for another big interest rate cut in November. The market is pricing in a 70% probability of a 25 basis point rate cut next month as a strong labour market and the solid services PMI data earlier in the week gives the Fed little reason for another outsized cut.
