- Indian Rupee (INR) rises for a second day
- Indian GDP rose to 8.4% in the Oct-Dec quarter
- US Dollar (USD) falls after Jerome Powell’s testimony
- Fed Powell reiterated that more evidence of cooling inflation is needed
The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a second straight day. The pair fell -0.02% in the previous session, settling on Tuesday at 82.89. At 18:00 UTC, USD/INR trades -0.05% at 82.84 and trades in a range of 82.80 to 82.91.
The Indian Rupee is pushing higher amid mounting speculation that India’s GDP growth in the current fiscal year ending March could be close to 8%, according to Reserve Bank of India Governor Das.
India’s economy accelerated at 8.4%, its fastest paced in 18 months in the final quarter of last year, thanks to strong manufacturing and construction activity.
Following the data, the government revised its growth forecasts for this fiscal year to 7.6% from 7.3%. The central bank had projected growth of 7% in the next fiscal year; Governor Das said he was hopeful about next year, and 7% growth was very much on the table.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.51% at the time of writing at 103.27, marking the fourth straight day of losses.
The US dollar is heading lower as the market continues digesting Federal Reserve chair Jerome Powell’s Testimony before Congress today.
The head of the central bank said in pre-released remarks that while the Feds’ interest rate hikes are placing downward pressure on inflation, policymakers still need more evidence that inflation is moving to the 2% target.
Federal Reserve chair Jerome Powell once again indicated that while the economy is strong he does expect the central bank to cut rates this year.
Powell noted that inflation has cooled considerably since hitting a four-decade high in 2022.
This year, however, recent data has done little to clarify the timing of the Fed’s next move with rates. Some project that price pressures could ease, while others anticipate that inflation will persist.
Powell’s testimony comes as inflation is closing in on the Fed’s 2% target, but the economy appears to remain resilient.
On the data front, ADP private payrolls rose to 140,000, up from 107,000. This was, however, below analyst estimates of 150,000. The data comes ahead of Friday’s non-farm payroll.
