- Indian Rupee (INR) falls after gains yesterday
- India’s trade deficit was $26.42 bn
- US Dollar (USD) falls versus major peers
- US PPI falls to a 5-year low
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising for a third straight day The pair rose 0.14% in the previous session settling on Wednesday at 85.39. At 22:30 UTC USD/INR trades 0.06% higher at 85.44 and traded in a range of 85.28 to 85.70.
The Indian Rupee is falling despite optimism that the India-Pakistan conflict has ended.
Meanwhile, according to government data, India’s trade deficit was its widest in five months in April, with imports of petroleum products jumping, limiting the impact of and increasing next sports to the US.
India’s trade deficit was $26.42 billion higher than the 20 billion forecast by our economists. Meanwhile, exports were 38.49 billion in April, and imports were 64.91 in March. The trade deficit is wider than expected, with a surprising increase in imports of oil and electronics goods.
The US Dollar is rising against the Rupee but falling against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, fell 0.23% to 100.81, giving back yesterday’s gains.
The US dollar is falling after weaker-than-expected wholesale inflation data and weak retail sales. US wholesale inflation measured by the producer price index fell by the most in five years, dropping by 0.5% month on month in April. The data suggests companies absorb the higher prices from Trump’s trade tariffs rather than pass them on to the fragile consumer.
With consumer confidence deteriorating, retail sales also saw growth slow. Retail sales rose 0.1% last month after an upwardly revised 1.7% jump in March. The boost in March was partly due to purchases of items such as cars being pulled forward ahead of Trump’s tariffs.
Meanwhile, Federal Reserve Chair Jerome Powell warned today of more frequent supply shocks and volatile inflation.
