- Indian Rupee (INR) falls lower on Friday & across the week
- The RBI cut rates by 25 bps to 5.25%
- The US Dollar (USD) is flat versus major peers
- US core PCE falls to 2.8% YoY in September
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising after losses yesterday. The pair fell -0.37% in the previous session, settling on Thursday at 89.83. At 18:30 UTC on Friday, the pair is rising 0.15% at 89.97. The pair is set to rise 0.79% across the week.
The Indian rupee is falling after the Reserve Bank of India cut its repo rate and left the door open for further easing. The RBI reduced rates by 25 basis points to 5.25% as it seeks to support the economy, which is under pressure from punitive US tariffs that have widened its trade deficit and pushed its currency to a record low.
Prime Minister Modi has stepped up domestic economic reforms, including lowering consumer taxes, labour rule changes, and easing financial sector regulation.
The US Dollar is rising against the Rupee but is unchanged versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is 0%, to 98.99. The USD is set to fall across the week.
US dollar is falling across the week as investors ramp up Fed rate cut expectations. Today’s data showed that US core PCE, the Fed’s preferred inflation gauge, was weaker than expected at 2.8% year on year in September, down from 2.9% in August and below the 2.9% forecast. However, it is worth noting that this is delayed data from September, released late due to the government shutdown. October’s data is still missing.
The data comes after ADP payrolls earlier in the week unexpectedly showed a decline in private payrolls in November. The University of Michigan consumer confidence survey also reflected strong pessimism for labour expectations despite a slight improvement.
The data support the view that the Federal Reserve will cut rates by 25 basis points at next week’s December meeting.
