The Indian Rupee softened against the US Dollar and a number of its other most traded peers after positive jobless claims data from the United States increased speculation that the Federal Reserve could choose to begin tapering its monetary easing programme next week.
The Rupee could have weakened further but it was supported by data which showed that India’s industrial activity made a significant recovery in July. According to the Ministry of Statistics and Programme Implementation, the index for industrial production climbed by 2.6% in July compared to the previous year. Manufacturing which constitutes up to 75% of India’s industrial production saw a steady improvement with output rising by 3%. The data took economists by surprise as many had been predicting that the data would show a contraction of 0.5%.
Despite the preliminary monthly figures being the strongest recorded since March, it is still a far cry from the double-digits of growth enjoyed for large parts of the last decade when the South Asian giant was enjoying a boom period.
Despite the rebound in the industrial sector other parts of the Indian economy continue to be weak. Mining output fell by 2.3%, the sectors ninth consecutive monthly decline.
Inflation in India received a slight reprieve after the Consumer Price Index (CPI) showed that based inflation eased to 9.52% in August against the 9.64% recorded in the previous month. The corresponding provisional inflation rates for rural and urban areas for August 2013 are 8.93% and 10.32% respectively.
The Rupee is likely to extend its losses against the US Dollar on Friday as another batch of US data releases is published. All are expected to show that the US economy continues to improve and if so market expectations for the Federal Reserve to taper its monetary easing policy will increase at the expense of emerging market economies like India’s.
Current Rupee (INR) Exchange Rates:
The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 100.504
The Euro/Indian Rupee Exchange Rate is currently in the region of: 84.5648
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 63.5824
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 58.7336
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.6994
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 61.6542
(Correct as of 14:25 pm GMT)
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