- Indian Rupee (INR) falls for a fourth day
- Indian GDP is expected to slow to 6.7%
- US Dollar (USD) is falling versus major peers
- Trump fired Federal Governor Lisa Cook
The US dollar-to-Indian rupee (USD/INR) exchange rate rose for a fourth straight session. The pair rose 0.32% in the previous session, settling on Monday at 87.60. At 21:30 UTC, USD/INR trades +0.02% at 87.62 and traded in a range of 87.58 to 87.79.
India’s economy is expected to have slowed to 6.7% in the April to June quarter amid weak industrial activity and subdued private investment, which offset a rebound in government spending. This would be down from 7.4% in the previous quarter.
The Indian government has boosted capital spending across the first quarter of the fiscal year, but weak consumer demand has meant private investment remains subdued.
The RBI cut interest rates by 75 basis points during the same period, including a larger-than-expected 50-basis-point reduction in June. However, there has been a muted impact on growth.
Indian exporters will brace for a sharp decline in US orders after trade talks collapsed and Washington confirmed that new tariffs will take effect from Wednesday.
The US Dollar rose against the Rupee but fell versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling -0.17% to 98.26, after gains yesterday.
The U.S. dollar moved lower on Tuesday as President Trump took an unprecedented move to fire Federal Reserve Governor Lisa Cook, which renewed concerns over the central bank’s independence.
Trump said he was firing Cook over allegations of mortgage fraud in a move that could test the boundaries of presidential power over the US central bank.
Cook responded by saying Trump has no authority to fire her and she will not resign.
While Trump’s announcement surprised the market, the reaction was relatively muted. Should Trump successfully remove Cook, he would like to replace her with a more dovish-leaning board member to support his wish for rates to fall faster.
