Indian Rupee to US Dollar (INR/USD) Exchange Rate
On Tuesday the Indian Rupee to US Dollar (INR/USD) exchange rate moved away from a nine-month low in response to the Reserve Bank of India’s (RBI) decision to leave interest rates on hold.
While the Rupee later pared gains as the US Dollar was bolstered by a strong domestic construction spending figure, declines in the Indian currency were limited on Wednesday following the publication of an impressive HSBC Services PMI.
The gauge of India’s services sector jumped to a five-month high of 53.6 in November, up from 51.0 the previous month. This marked the seventh monthly increase.
However, while the headline figure was solid, it did mask some underlying issues.
Economist Pranjul Bhandari said of the result; ‘Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition.’
Today’s US services reports could trigger additional INR/USD movement in the hours ahead.
The US Dollar to Indian Rupee (USD/INR) exchange rate is trading in the region of 61.9100.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Trending Higher after Services PMI
The Pound Sterling to Euro (GBP/EUR) exchange rate was able to move closer to the 1.27 level on Wednesday as Services/Composite PMI’s for two of the Eurozone’s largest economies (France and Germany) were negatively adjusted.
Sterling’s upsurge continued as the UK’s Services PMI showed stronger-than-anticipated growth in the nation’s most important sector.
The services index rallied from 56.2 to 58.6 in November.
The data indicates that the slowdown in some aspects of the UK’s economic recovery might not have affected the core generators of growth.
The Pound advanced on rivals like the Euro and US Dollar (GBP/USD) after the report was released.
The GBP/EUR exchange rate was trending in the region of 1.2693
Euro to US Dollar (EUR/USD) Exchange Rate Struggles before Retail Sales
Ahead of the publication of the Eurozone’s retail sales report, the Euro to US Dollar (EUR/USD) exchange rate shed over 0.4%.
While the US Dollar was riding high off the back of yesterday’s hawkish comments from a Fed official and a solid construction spending report, the Euro came under pressure as a result of disappointing domestic data.
The Services PMI’s for the Eurozone and its largest economies showed that economic growth in the currency bloc was at a 16-month low.
The news prompted this comment from Markit economist Chris Williamson; ‘The final Eurozone PMI came in even weaker than the earlier flash estimate, signalling the weakest pace of expansion since July of last year. The survey data suggest the region is on course to see a mere 0.1% GDP growth in the final quarter of the year, with a strong likelihood of the near-stagnation turning to renewed contraction in the New Year unless demand shows signs of reviving.’
However, the Euro to US Dollar exchange rate could recover some ground in the hours ahead if the Eurozone’s retail sales report prints strongly.
The Euro to US Dollar (EUR/USD) exchange rate was trading in the region of 1.2338
Canadian Dollar to US Dollar (CAD/USD) Higher before BOC Decision
After the Bank of Canada’s interest rate decision the Canadian Dollar to US Dollar (CAD/USD) exchange rate advanced.
The central bank might have opted to leave interest rates on hold, as expected by economists, but it also signalled that the Canadian economy is growing – a situation which could encourage the BOC to consider increasing the benchmark interest rate from the present 1% earlier than currently projected.
Earlier…
With the Bank of Canada’s interest rate decision looming, the Canadian Dollar to US Dollar (CAD/USD) exchange rate advanced 0.2% on the day’s opening levels.
A sturdy Manufacturing PMI score lent the Canadian Dollar support earlier in the week and the commodity-driven asset also derived support from an improvement in oil prices.
While the BOC is unlikely to make any adjustments to fiscal policy when it meets later today, the tone of the accompanying policy statement will be of particular interest.
If the central bank offers a hawkish outlook, the Canadian Dollar could advance.
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trading in the region of 0.8783
