The US Dollar to Indian Rupee (USD/INR) exchange rate advanced on Thursday as the US Dollar was buoyed by unexpectedly encouraging Initial Jobless and Continuing Claims figures.
Before the US reports were published the Rupee had rallied to an over one-week high against the US Dollar as a result of central bank speculation.
Investors bet that the Reserve Bank of India’s decision to change the limit on foreign investment in government assets by 5 billion Dollars would prove positive for the Indian economy and the Rupee strengthened by 0.2% as a result.
In the opinion of currency expert Ankur Jhaveri; ‘The decision is clearly positive for the Rupee as it will attract far more inflows. Month-end Dollar demand by oil companies is likely to cap any significant gains.’
The Pound Sterling to Indian Rupee exchange rate softened slightly as investors digested below-forecast UK retail sales figures.
The Rupee later went on to pare its advance against the US Dollar as upbeat employment data bolstered the ‘Greenback’.
The US Dollar posted widespread gains after first time applications for unemployment claims unexpectedly dropped to an 8-year low of 284,000 in the week ending July 19th. This smashed expectations and added to the brightening picture of the US employment sector.
Continuing Claims slid from a revised 2508,000 to 2500,000 rather than rising to 2510,000 as expected.
It wasn’t all good news for the US however as the nation’s Markit Manufacturing PMI showed a slight slowing in the pace of expansion in July.
The measure slipped from 57.3 in June to 56.3 in July.
Economists had expected it to advance to 57.5.
However, while the result was slightly disappointing, it was still indicative of a more resilient US economic recovery in the third quarter.
Markit economist Chris Williamson issued the following statement with the figures; ‘US manufacturers are enjoying a summer of scorching growth. Output grew in July at a rate only just below the four-year peak seen in June as inflows of new orders surged higher again. The data suggest the sector is growing at an annualised rate of roughly 8% as we moved into the second half of the year. The growth rebound that the survey has signalled for the second quarter therefore looks to have been sustained into the third quarter.’
US New Home Sales also slid by -8.1% in June on a month-on-month basis. This was a much steeper decline that the -5.8% drop anticipated and followed a negatively altered 8.3% increase in May.
Tomorrow the US Dollar to Indian Rupee (USD/INR) exchange rate could experience volatility in response to the US Durable Goods Orders data. If the figure confirms that goods orders increased by 0.4% in June after declining by a revised 0.9% in May the US Dollar could post some modest additional gains against the Rupee before the weekend.
Movement in the GBP/INR pairing will be driven by the UK’s GDP figures.
Indian Rupee (INR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Indian Rupee,102.0990,
US Dollar,,Indian Rupee,60.1500,
Euro,,Indian Rupee,80.9920,
Australian Dollar,,Indian Rupee,56.6550,
New Zealand Dollar,,Indian Rupee,51.6090,
[/table]
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