- Indian Rupee (INR) falls for a second day to a record low
- The absence of an Indian US trade deal unnerves investors
- The US Dollar (USD is falling versus major peers
- The OECD lifted growth forecasts
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising for a second straight day. The pair rose 0.29% in the previous session, settling on Monday at 89.61. At 21:30 UTC on Tuesday, the pair settled +0.36% at 89.93.
The Indian rupee fell to a record low on Tuesday, extending losses, due to the absence of a trade deal agreement between India and the US, which is hurting trade and foreign investor inflows.
Shortly after the local spot market closed, the rupee weakened to 90 per U.S. dollar on the interbank matching system before paring some of those losses.
The rupee has remained under pressure despite strong economic growth in India in the July to September quarter.
Some analysts warned that the rupee could come under further pressure, although the Reserve Bank of India’s market interventions should help keep volatility in check.
The RBI rate decision is on Friday, and the central bank is widely expected to cut interest rates by 25 basis points
The US Dollar is rising against the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling -007%, to 99.35.
The U.S. dollar is falling versus its major peers despite the OECD revising US GDP forecasts higher.
The Paris-based organisation expects US GDP to rise 2% in 2025 before slowing modestly to 1.7% in 2026, which is still stronger than the previous forecast.
Any upside in the US dollar has been limited amid rising expectations that the Federal Reserve will cut interest rates at its meeting next week.
The market is pricing in an 87% probability of a rate cut. Data released on Monday supported the view that the Fed was on track to reduce rates. Isma manufacturing unexpectedly fell to 48.2 from 48.8. Meanwhile, the jobs subcomponent fell to 44, whilst the price paid subcomponent rose by 0.5 points due to tariffs.