- Indian Rupee (INR) is unchanged after losses last week
- Indian manufacturing PMI hit a 5-year high
- The US Dollar (USD) is unchanged versus major peers
- US ISM manufacturing fell to 48.7 from 49.1 in September
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after gains last week. The pair rose 1.06% in the previous week, settling on Friday at 88.76. At 18.30 UTC on Friday, USD/INR traded -0.05% higher at 88.72 and traded in a range of 88.70 to 88.81.
The Indian rupee is unchanged despite the manufacturing sector growing at the fastest pace in five years. The Indian manufacturing PMI, a good gauge for activity, jumped to 59.2 in October up from 57.7 in September, boosted by domestic demand, which offset a slowdown in export growth.
Manufacturers cited demand strength, efficiency improvements, new clients, and investments in technology, which have driven production higher. International sales growth slowed and new export orders increased at the slowest pace in 10 months.
Input cost inflation is at an 8-month low, although output inflation remained at its highest level in almost 12 years for a second straight month. Firms are passing on higher freight and labour costs to customers, and strong demand allows them to keep prices elevated.
The US Dollar is falling against the Rupee but is flat versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading 0.01% at 99.81, after gains last week.
The U.S. dollar is unchanged as investors digest the latest ISM manufacturing figures. Given the ongoing U.S. government shutdown, US data is in short supply, so the figures released are attracting more attention than usual.
The manufacturing PMI contracted in October for an eighth straight month following a two-month expansion. The PMI slipped to 48.7 in October, down from 49.1 in September, highlighting weakness in the sector.
The employment index rose to 46 from 45.3, signaling job losses for a ninth straight month. The new orders index also improved to 49.4, up from 48.9, but was still in contraction below 50.
Given the lack of inflation data being released, the market is watching price pressures closely, which eased in this report, suggesting that input costs are stabilising easing of even as demand remains sluggish.
