- Indian Rupee (INR) is falling after gains last week
- US H-1B tariffs fee will rose to $100k, impacting India
- US Dollar (USD) is falling versus major peers
- Fed Stephen Miran explained his 50 bps rate cut vote
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising, snapping after losses last week. The pair fell 0.2% in the previous week, settling on Friday at 88.10. At 18:30 UTC, USD/INR trades 0.54% at 88.30 and trades in a range of 88.12 to 88.35.
The Indian rupee is falling sharply following President Trump’s visa crackdown. Trump announced $100,000 fee on H-1B visa applications. Indians made up 71% of the H-1B approvals last year. India’s $283 billion IT industry, which derives around 57% of revenue from the US, leans on this visa programme and outsourcing IT service support for growth.
Indian stocks fell sharply lower dragged by technology stocks, which lost around $10 billion in market capitalisation.
The announcement hit sentiment, and the Rupee could remain under pressure until there is progress on US-Indian trade talks.
The US slapped an additional 25% trade tariffs on India as punishment for buying Russian oil. This took the total tariff on Indian imports to 50%.
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, is falling 0.26% at 97.39, after three days of gains.
The US dollar is falling as the market weighs up commentary from Federal Reserve officials following the 25 basis point rate cut last week.
A lot of attention is on Federal Reserve Stephen Miran’s commentary, who is the nearest policy maker to join the board following appointment by President Trump.
Trump has made no secret of the fact that he is keen for the Federal Reserve to slash interest rates more aggressively. Steven Mirren voted for a steeper 50 basis point rate cut at the meeting last week.
Miran argued that changes in tax and immigration policy, as well as easing rental costs, deregulation, and incoming revenue from tariffs, are creating a different economic landscape.