- Indian Rupee (INR) is rising for a third straight day
- Indian services PMI grew at the fastest pace for 6 months
- US Dollar (USD) rises versus major peers
- US NFP rose to 147k vs 110k forecast
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling for a third straight day. The pair fell by -0.01% in the previous session, settling on Wednesday at 85.62. At 18:30 UTC, USD/INR trades -0.23% lower at 85.43 and traded in a range of 85.17 to 85.69.
The Indian rupee is rising as the Indian economy shows signs of strength. The Indian service sector activity experienced its strongest growth in 10 months in June, driven by solid demand and easing price pressures.
The services PMI rose to 60.4 in June, up from 58.8 in May, although this was a touch below the preliminary estimate of 60.7.
Delving deeper into the numbers, the new business sub-index, a key gauge for demand rose firmly, and companies benefited from persistent strength in the domestic market. Export orders also saw solid growth, although the pace slowed slightly from May.
The US Dollar is falling against the Rupee but is rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.38% to 97.14, after losses yesterday.
The U.S. dollar is rising after the nonfarm payroll report showed that the US labour market was more resilient than expected.
The non-farm payroll report showed that 147,000 jobs were added in June, above the 110,000 expected and broadly in line with the 12-month average of 146,000. Meanwhile, the unemployment rate unexpectedly fell to 4.1% down from 4.2% defying expectations of a rise to 4.3%. Overall, the data points to a labour market that is not showing any clear signs of deterioration, which would force the Fed to cut rates in July.
However, wage growth continued to cool, with average hourly earnings rising by just 0.2% month-on-month and 3.7% annually, missing forecasts of 0.3% and 3.9%, respectively.
Following the data, the market is pricing in just fifty basis points worth of rate cuts this year down from 65 basis points before the release.
