- Indian Rupee (INR) inches up from a record low
- The absence of an Indian US trade deal hurt sentiment
- The US Dollar (USD) is rising versus major peers
- US jobless claims fell to a 3-year low
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after three days of gains. The pair rose 0.28% in the previous session, settling on Wednesday at 90.17. At 18:30 UTC on Wednesday, the pair fell -0.34% at 89.86.
The Indian rupee recovered from a record low on Thursday, but continued to trade past 90 per dollar.
The rupee has fallen to a record low as delays in concluding a trade deal with the US dent sentiment. However, it pared some of those losses after the Reserve Bank of India stepped in and sold some dollars to support the currency.
The pessimism spilled over into the equity market with the benchmark Nifty 50 falling by 0.5% yesterday as the rupiah moved above 90, although the Nifty did eke out small gains of 0.2% today.
India is among the few major economies that have yet to finalize a trade deal with the US, although officials remain optimistic that one will be completed soon. In the meantime, steep 50% tariffs on Indian goods have weighed on exporters. India’s trade deficit reached a record high, driving a significant widening of the current account gap.
The US Dollar is falling against the Rupee but rising versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.12%, to 98.98.
The US dollar is rising modestly today after stronger-than-expected data, although gains are likely to be limited, and expectations that the Federal Reserve will be cutting interest rates next week.
US jobless claims unexpectedly fell by 5k to 191k, well below the 220,000 expected and the lowest level in more than 3 years. However, it’s worth noting that the data can be volatile around this time of year due to the Thanksgiving holiday.
The data came after ADP’s payroll data yesterday showed that private payrolls dropped by 32000, the most on record.
The market is still pricing in 87% probability that the Fed will reduce rates by 25 basis points in December.
