• Indian Rupee (INR) holds steady after losses yesterday
  • Services PMI beats forecasts
  • US Dollar (USD) rallies after Fed rate hike
  • Fed sees rates going higher.

The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady on Thursday after gains in the previous session. The pair rose +0.01% yesterday, settling at 82.71, trading in a range between 82.60 to 82.81. At 16:00 UTC, USD/INR trades +0.01% at 82.68.

The Indian service sector activity gathered momentum in October, according to the S&P India services pmi. Despite high inflation, the dominant sector was boosted by robust demand, which resulted in the second fastest hiring pace in over three years.

The services PMI rose to 55.1 in October up from 54.3 in September, a six-month low and easily beating expectations for 54.6. The level 50 separates expansion from contraction. The new orders sub-index rose as market conditions improved, boosting sales.

Whilst companies are seeing their costs rise and food and fuel prices increase. They also say that they are managing to pass these on to the consumer for now.

The US Dollar is rising against the Rupee but falling against its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.65% at the time of writing at 112.51 after booking gains of 0.65% yesterday.

The US dollar is charging higher as investors continue to digest the latest Federal Reserve interest rate decision. The Fed raised interest rates by 75 basis points, as analysts expected. The statement that was released with the interest rate decision had a more dovish lean, suggesting that the Federal Reserve was nearing the final phase of its rate hiking cycle.

However, in his speech, Federal Chair Jerome Powell warned that interest rates would need to rise higher than initially projected. He said that it was far too early to be discussing any dovish pivot. Expectations are now for a rate increase of 50 basis points in the December meeting and for the Fed terminal rate to arrive at 5%, up from 4.5%. The more hawkish outlook lifted the USD higher.