- Indian Rupee (INR) rises after Fitch growth upgrade
- Indian GDP is expected to be 7.2%
- US Dollar (USD) is flat versus its major peers
- US Juneteenth public holiday means light volumes
The US Dollar Indian Rupee (USD/INR) exchange rate is rising after two days of losses. The pair fell -0.2% in the previous session, settling on Tuesday at 83.47. At 17:00 UTC, USD/INR trades +0.09% at 83.43 and is in a range of 83.32 to 82.56.
The Indian rupee is pushing higher after rating agency Fitch predicted stronger growth in India.
Fitch Ratings now expects India to grow by 7.2% in the current fiscal year, with its central bank opting for just one quarter-point rate cut.
The rating agency also raised the world growth forecast in its global economic outlook for 2024 to 2.6%, up from 2.4%, as confidence in the European recovery gathers pace and China’s export sector revives.
However, the agency reiterated that they expect just one interest rate cut this year to 6.25%, with more rates in the coming rate cuts during the coming years. Fitch also warned that it expects growth to slow in later years as it approaches medium-term trend estimates.
The US Dollar is falling against the Rupee but unchanged versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.01% at the time of writing at 105.24, after two days of losses.
The US dollar is holding steady in quiet trade as U.S. stock markets remain closed for Juneteenth day.
The public holiday also means that investors will not have fresh economic data to digest, meaning catalysts are in short supply.
The dollar fell yesterday after US retail sales came in weaker than expected, falling 0.1% month on month in May.
Following the release, a top Federal Reserve official warned that price cuts at big retailers and weaker retail sales suggest a slowdown in consumer spending has started, which increases the chances that the Federal Reserve will cut interest rates this year.
Comments came from Adriana Kugler, a Fed governor. He said that she believed inflation was on course to hit the Federal Reserve’s 2% goal.
She struck a more dovish tone on interest rates than Federal Reserve officials, who voted to leave rates unchanged and forecast just one rate cut this year over concerns of lingering price pressures.
