- Indian Rupee (INR) gains for a third day
- Indian services PMI rises to 59 up from 56.5
- US Dollar (USD) falls against its major peers
- Trump trade tariffs raise fears over the US outlook
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling for a third straight day. The pair fell -0.01% in the previous session, settling on Tuesday at 87.25. At 19:00 UTC USD/INR trades -0.5% lower at 86.80 and is in a range of 86.78 to 87.33.
The rupee posted its strongest daily gains in 3 weeks, thanks to a weaker dollar and dollar sales from foreign and state-run banks.
On the data front, figures show that growth in India’s service sector accelerated in February, boosted by robust demand and a solid business outlook, which led to a significant increase in hiring.
India’s services PMI rose to 59 in February from January’s 26-month low of 56.5. However, it was still lower than the 61.1 that economists had projected. This also marked the fastest level of growth in six months, with the new export business playing a major role in driving output in the service sector.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling -1.2 % on Wednesday, marking the third day of losses.
The US dollar is falling sharply, dropping to its lowest level in almost four months amid concerns over the negative impact of U.S. trade tariffs on the US economy.
U.S. dollar extended losses after the February 8 EP private payroll report posted its smallest increase and seven months.
The ADP employment report showed 77,000 jobs were added in the private sector in February well below the 140,000 forecast by economists and down from 183,000 in the previous month.
Meanwhile USISM services index unexpectedly rose by 0.7 to 53.5 defying expectations of a decline to 52.6. Market attention is turning to Friday’s nonfarm payroll reports which are expected to rise by 160,000 whilst the unemployment rate is expected to remain unchanged at 4%. Weak data could add to concerns of a downturn in the world’s largest economy.