- Indian Rupee (INR) falls after four days of gains
- Indian private sector growth was the strongest in 20 years
- US Dollar (USD) is rising versus major peers
- All eyes are on Fed Powell’s speech
The US dollar-to-Indian rupee (USD/INR) exchange rate rose, ending a four-day losing run. The pair fell -0.06% in the previous session, settling on Wednesday at 87.01. At 21:30 UTC, USD/INR trades +0.31% at 87.29 and traded in a range of 86.92 to 87.34.
The Rupee is falling against a stronger USD despite Impressive business activity data. As no figures show that India’s private sector activity grew at the fastest pace on record in August, boosted by a surge in demand within the dominant sector. This allowed firms to hire at the fastest pace in over 12 years.
The results are in sharp contrast to expectations for a slowdown in economic growth in India to 6.4% this fiscal year, following a 7.4% expansion in the first three months of 2025.
SBC’s slash India composite PMI compiled by S&P Global jumped to 65.2 in August, up from 61.1, defying expectations of a fall to 60.5. This marked the highest reading since the service started in December 2005 and remained above the 50 level, which separates growth from construction for a 49th straight month.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.43% to 98.64, after modest losses yesterday.
The U.S. dollar is pushing higher on Thursday ahead of a highly anticipated speech by Federal Reserve Chair Jerome Powell on Friday at 10 AM Eastern Time. The markets will be watching closely for any clues on whether the US central bank will be cutting interest rates in the September meeting.
Investors had ramped up fed rate cut bets following a weak nonfarm payroll report for July; however, signs of sticky wholesale inflation resulted in the markets paring rate cut expectations.
Cleveland Fed President said that if the rate decision were tomorrow, she would vote to leave rates unchanged.
A hawkish-sounding Powell could boost the USD higher.