- Indian Rupee (INR) is rising after gains last week
- Indian trade deficit widened to a record $41.68 billion
- The US Dollar (USD) rises versus major peers
- Fed rate cut expectations fall to 43%
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling on Monday after modest gains last week. The pair rose 0.03% in the previous week, settling on Friday at 88.68. At 18.30 UTC on Monday, USD/INR traded -0.03% at 88.63 and traded in a range of 88.54 to 88.73.
The Indian Rupee is rising after President Trump rolled back tariffs on over 200 food items, which is likely to benefit Indian agricultural exporters.
The Federation of Indian Export Organisation said that exports of between $2.5 billion $3 billion will benefit from the tariff exemption. It also paves the way for improved US-India trade talks after the latter was hit with 50% punitive tariffs.
Separately, India’s trade deficit widened to a record $41.68 billion in October, driven by higher gold imports and lower US-bound exports in the second month of the steep US tariffs. Data from the RBI showed that the trade deficit has widened to a 13-month high of $32.15 billion in September.
The US Dollar is falling against the Rupee but rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading +0.21% at 99.51, after losses last week.
The USD is rising after losses last week, as the market prepares for US data releases following the US government’s reopening after the longest shutdown in history.
The market is focusing on the September non-farm payroll report, scheduled for release on Thursday, which could provide clues on how the jobs market is holding up.
The market has lowered Fed rate cut expectations to 43% down from 90% a month ago, and 63% just a week ago.
There is still a lack of clarity over what data from October will be released. October inflation and non-farm payroll figures may never be released, which could complicate the picture for the Fed at the December meeting.
