- Indian Rupee (INR) ticks a few pips higher services PMI expands for first time in 8 months
- US Dollar (USD) lacks direction with still no clear winner in US elections
- Congress could remain split rather than the blue wave initially expected
- US ADP Payroll data & ISM non-manufacturing figures up next
The US Dollar Indian Rupee (USD/INR) exchange rate is ticking a few points lower on Wednesday paring some of the small gains from the previous session. The pair gained 0.1% on Tuesday, settling at 74.61. At 12:15 UTC, USD/INR trades down -0.04% at 74.58.
The exchange rate is treading water as investors sit cautiously awaiting the results of the US elections. As counting heads into the second day, there is still no clear winner. Joe Biden has a slight lead with 238 electoral votes whilst Trump has 213 at the time of writing. However, the elections hang on the key swing states where votes are still being counted. Both Trump and Biden are still in with a chance of winning the race to the White House. The result is not expected to be known for several hours.
Congress is another area of uncertainty. Democrats have so far failed to flip as many seats in the Senate as the polls had suggested. This is important, because even if Joe Biden wins but fails to take the Senate from the Republicans then political gridlock in Washington will likely continue. This means that the huge fiscal stimulus bill that a blue wave would have brought is looking less likely. Investors are reining in stimulus expectations.
The elections will remain in focus as votes are counted. US ADP private payroll data and US ISM non-manufacturing figures will also be in focus ahead of Friday’s non-farm payrolls.
Activity in India’s dominant service sector expanded in October for the first time since the start of the coronavirus pandemic. Data revealed that the services PMI climbed to 54.1, the highest level since February’s 57.5. This was also the sixth straight month of gains in the service sector after the PMI gauge recorded a low of 5.4 back in April.