- Indian Rupee (INR) falls after gains yesterday
- Sluggish growth and foreign investor outflows hit Rupee
- US Dollar (USD) rises against its major peers
- US ISM services PMI rises by more than expected
The US Dollar Indian Rupee (USD/INR) exchange rate is rising, recovering losses from the day before. The pair lost -0.07% in the previous session, settling on Monday at 85.70. On Tuesday at 19:30 UTC, USD/INR trades +0.07% at 85.76 and trades in a range of 85.65 to 86.03.
The Rupee is hovering around record lows. The Rupee has been under pressure in recent weeks owing to a combination of domestic and international factors despite efforts by the Reserve Bank of India to support the foreign exchange market.
Sluggish economic growth, persistent foreign investor outflows from Indian equities and concerns about the US economic policies under a second Trump administration.
Indian GDP is expected to grow by 6.4% in the 2024 to 2025 period. This is down from 8.2% in the current 2023 to 24 period and is below the RBI’s 6.6% forecast.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, trades +0.27%, trading at 108.55 on Tuesday after losses in the previous session.
The USD recovered earlier losses after stronger-than-expected U.S. economic data, which raised questions about the Federal Reserve’s ability to cut interest rates.
ISM services activity accelerated in December, with stronger business activity pushing price measures to the highest level since 2023. The ISM services PMI rose to 54.1 in December. The level 50 separates function from construction. Meanwhile, the measure for prices paid for materials and services rose to 64.4.
The data comes as the Federal Reserve policymakers adopted a more cautious approach to cutting interest rates in the December meeting.
Separate data showed job openings rose to a six-month high in November, boosted by a jump in business services. JOLTS jobs opening rose to 8.09 million in November, up from 7.83 million in October and above the market expectation of 7.7 million.
