- Indian Rupee (INR) rises for the sixth straight day
- Moody’s downwardly revises Indian growth
- US Dollar (USD) sees largest 2-day selloff in 14 years
- US consumer confidence drops
The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a sixth straight session. The pair fell -0.88% yesterday, settling on Tuesday at 80.64. Today, at 15:30 USD/INR trades -0.10% at 80.55, trading in a range between 80.43 to 80.99. The pair is set to fall 1.7% across the week.
The Rupee is pushing higher despite Moody’s rating agency cutting India’s growth outlook for 2022. The rating agency cut the GDP forecast for the current year to 7%, down from previous estimates of 7.7%. The economy is then expected to decelerate to 4.8% growth in 2023, before recovering in 2024 with a growth of 6.4%
Moody’s cited high inflation, high-interest rates, and slowing global growth as reasons for the economic slowdown in India. Meanwhile, the Reserve Bank of India forecasts growth of 7% in 2022/23.
Adding to the upbeat mood towards the Rupee was news that China is easing some COVID restrictions.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -1.07% at the time of writing at 106.95, dropping to a two-month low. The USD index has seen its biggest two-day selloff in two years.
The USD fell yesterday after the cooler than forecast US inflation data and has kept falling today. The market is pricing in a 50 basis point rate hike at the December meeting, which was supported by several Federal Reserve speakers following the inflation data. Dallas Fed President Lorie Logan, San Francisco Fed President Mary Daly and Fed President of Philadelphia Patrick Harker indicated that a slower pace of hikes could be appropriate.
Still, inflation is just shy of four times the Fed’s target, which is being felt in households across America. Michigan consumer confidence fell by more than expected to 54.7 in November, down from 59.9 in October.