- Indian Rupee (INR) falls after to 86.10
- Indian equities fell in cautious trade ahead of Q3 earnings
- US Dollar (USD) rises against its major peers
- US non-farm payroll is due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is flat after two days of gains. The pair rose 0.07% in the previous session, settling on Wednesday at 85.92. On Thursday at 22:22 UTC, USD/INR trades -0.03% at 85.76 and trades in a range of 85.84 to 86.10.
The Rupee has fallen to a record low versus the US dollar on Thursday amid elevated US bond yields, a selloff in Indian domestic equities and an outflow of foreign capital.
The Sensex and the Nifty 50 fell -0.68% and 0.69%, respectively, amid a cautious mood ahead of Q3 corporate earnings.
Economists expect the steady decline in the Rupee to continue amid rising expectations that the Reserve Bank of India will cut rates next month despite inflation remaining above the RBI’s 4% medium target.
While remaining the fastest-growing major economy, growth in India has slowed to just above 5%. The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, trades at +0.15%, trading at 109.17 on Wednesday, adding to gains from Tuesday.
The US dollar is rising further despite U.S. Treasury yields retreating from an 8-month high as the long kiss way out the Federal Reserve’s path for interest rate cuts amid U.S. economic resilience.
US 10-year treasury yields fell 0.45% to 4.689% after hitting a peak of 4.7% yesterday, marking the highest level since April last year.
Attention is now turning to tomorrow’s closely watched US non-farm payroll report, which could provide further clues on the Fed’s policy outlook. Expectations are that 164k jobs will be added in December. The unemployment rate is expected to remain steady at 4.2% and wages are set to grow 0.3% month on month. A strong payroll report could add to concerns over the Fed’s ability to cut rates.
