- Indian Rupee (INR) is rising after falling 1% last week
- Indian composite PMI fell for a third straight month
- The US Dollar (USD) is flat versus major peers
- Fed rate cut expectations have rebounded
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after gains last week. The pair rose 1% in the previous week, settling on Friday at 89.64. At 16:30 UTC on Monday, the pair trades -0.58% at 89.11.
The repeat is rising, recovering from a record low against the US dollar. The Indian rupee had plunged over 1% last week after data showed that business activity growth slowed to a six-month low in November.
The PMI composite for India is 59.9, down from October, 60.4. This was slightly lower than the expectations of 60.1. While the index remains comfortably above the 50 level that separates expansion from contraction, it marks a third consecutive monthly decline, suggesting an economy that could be losing momentum.
Looking ahead to this week, attention will be on India’s Q2 GDP data on Friday, which is expected to show the economy grew at 7.2% annually, down slightly from 7.5% in the previous quarter.
The US Dollar is falling against the Rupee but is flat against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading -0.03% at 100.15, after strong gains last week.
The U.S. dollar is unchanged on Monday, trading in a narrow range as investors weigh dovish remarks from Federal Reserve officials that have boosted expectations of a rate reduction next month.
Federal governor Christopher Waller said on Monday that available data showed the US job market remains weak and warrants another 25 basis-point rate cut at the December meeting.
His comments follow New York Fed President John Williams’s statement on Friday that the US central bank could still cut interest rates in the near term.
The market is pricing in an almost 80% probability of a 25-basis-point rate reduction in December, up from 30% on Thursday.