The US Dollar to Indian Rupee (USD/INR) exchange rate prepared to close out the week in a stronger position as the US jobless level was shown to have fallen by more-than-expected.
US Dollar to Indian Rupee (USD/INR) Exchange Rate Higher after RBI Rate Cut, US Non-Farm Payrolls Data
The Rupee came under pressure this week as the Reserve Bank of India (RBI) unexpectedly cut interest rates.
Inflation concerns led the central bank to slash the policy repo rate to 7.50%, down from 7.75%.
In a statement issued with the decision, RBI Governor Raghuram Rajan noted; ‘Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action.’
The US Dollar to Indian Rupee (USD/INR) exchange rate hit a high of 62.6700
Economist Frederic Neumann said of the decision; ‘We expect one more rate cut [in 2015] but it looks as though the bias is towards more easing.’
The move initially caused the Rupee to decline, but the emerging market currency later climbed to a one-month high against the US Dollar as increased Indian inflows lent the Rupee support.
However, before the close of the week, the Rupee slumped against the ‘Greenback’ again as the US published stronger-than-forecast employment figures.
The US economy had been expected to add 235,000 jobs following a negatively revised gain of 237,000 in January.
The increase took the unemployment rate from 5.7% to 5.5%.
As the result raises the odds of the Federal Reserve increasing interest rates by the middle of this year, the US Dollar strengthened across the board following the data publication.
US Dollar to Indian Rupee (USD/INR) Exchange Rate Forecast
Additionally, according to a poll conducted by Reuters news agency, the Indian Rupee is likely to record a marginal depreciation against the US Dollar over the next 12 months.
Next week the US advance retail sales and University of Michigan confidence reports could impact USD/INR trading, but investors with an interest in the US Dollar to Indian Rupee currency pair will also be focusing on India’s trade balance, inflation and industrial/manufacturing production reports.
Reuters stated that the ‘poll also showed long positions on the Indian rupee were near a two-month high, although the latest survey found the currency is seen remaining around current levels of 62.15 for most of 2015, before weakening slightly to 63.50 a Dollar in 12 months. Expectations of economic reforms that could attract investors and lower India’s current account deficit will likely aid sentiment in Asia’s third-largest economy, especially after New Delhi announced a budget last week that focused on keeping a lid on borrowings while increasing spending on infrastructure.’
The US Dollar to Indian Rupee (USD/INR) exchange rate fell to a low of 62.1800
The US Dollar to Indian Rupee (USD/INR) exchange rate is currently trending in the region of 62.4500
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 94.4110
The Euro to Indian Rupee (EUR/INR) exchange rate is currently trending in the region of 68.0680
