- Indian Rupee (INR) holds steady, but rises 0.8% in June
- Portfolio inflows lift the Rupee
- US Dollar (USD) rises after strong GDP data
- US core PCE data due
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower after three days of gains. The pair rose 0.1% in the previous session, settling on Thursday at 82.10. At 11:30 UTC, USD/INR trades -0.1% at 82.01 and trades in a range of 82.01 to 82.19. The pair is set to rise 0.1% across the week.
The rupee may have fallen against the US dollar this week but is heading for its best monthly performance since January. The Rupee trades 0.8% thanks to strong foreign equity inflows.
$3.5 billion of inflows into Indian equities in June have pushed the BSE Sensex and the Nifty 50 index to record highs. The Rupee has fared better than most other Asian currencies this month. The offshore yuan is down around 2% in June, and the Thai Baht has shed 2.4% amid weak China data and concerns about the Fed hiking further.
The US Dollar is falling against the Rupee but rising against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.14% at the time of writing at 103.48, extending gains for a third straight day.
The dollar is heading higher after data showed that the US economy was stronger than expected in the first three months of the year. US GDP grace was output A revised to 2% QoQ annualised, up from 1.3%. Claims were also stronger than expected, posting the largest drop in 20 months.
The data shows that US economy is proving to be much more resilient than expected, even as inflation remains high and interest rates rise.
Attention will now turn to US core PCE which is the federal reserve’s preferred Gauge for measuring inflation. The core PCE is expected to hold steady at 4.7% in May, unchanged from April. Strong growth and persistent inflation could fuel bets that the Federal Reserve will keep hiking interest rates.