US Dollar to Indian Rupee (USD/INR) Exchange Rate Forecast: Rupee Slips before US Unemployment Report

With ‘Greenback’ demand from importers increasing towards the end of the month, the US Dollar to Indian Rupee (USD/INR) exchange rate strengthened.

US Dollar to Indian Rupee (USD/INR) Exchange Rate Climbs as Yellen Supports Rate Hikes

The Rupee also declined against the US Dollar in response to Friday’s comments from Federal Reserve Chairwoman Janet Yellen.

While Yellen wasn’t exactly hawkish, she did at least imply that the Fed is still moving closer to increasing borrowing costs.

Her remarks saw the US Dollar rise across the board even as she cautioned; ‘I would be uncomfortable raising the federal funds rate if readings of wage growth, core consumer prices, and other indicators of underlying inflation pressures were to weaken, if market-based measures of inflation compensation were to fall appreciably further, or if survey-based measures were to begin to decline noticeably.’

The US Dollar to Indian Rupee (USD/INR) exchange rate hit a high of 62.6700

However, USD/INR gains were a little limited as the US final fourth quarter Gross Domestic Product figure (which was expected to be revised from 2.2% to 2.4%) was left unchanged.

This slightly disappointing result had been preceded by a concerning US Durable Goods Orders number earlier in the week.

The Indian Rupee has shown remarkable resilience against a bullish US Dollar in recent months, and the Reserve Bank of India (RBI) has had to intervene in the market in order to restrain the currency.

Some industry experts are now saying that the Rupee needs to soften in order to give Indian exports a competitive edge, but it might take the Federal Reserve increasing borrowing costs to drive the Rupee notably lower.

The US Dollar to Indian Rupee (USD/INR) exchange rate fell to a low of 62.4660

Ahead of the publication of the influential US Personal Consumption report, the US Dollar was up 0.2% on the day’s opening level and trading in the region of 62.6200.

Meanwhile, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trading in the region of 92.9370, unchanged from the day’s opening levels.

US Dollar to Indian Rupee (USD/INR) Exchange Rate Forecast to Fluctuate after Manufacturing/Employment Figures

Over the course of the week the Indian reports with the most potential to initiate Indian Rupee exchange rate movement include tomorrow’s Infrastructure Output figure and Thursday’s HSBC Manufacturing PMI.

The manufacturing gauge is believed to have moved further away from the 50 mark separating growth from contraction in March, advancing from 51.2 to 52.88. If that proves to be the case, it could lend the US Dollar support.

However, the report investors will be waiting for is Friday’s US Non-Farm Payrolls number. The US economy is believed to have added 248,000 positions in March, leaving the unemployment rate at 5.5%.

If the NFP report surprises to the upside (as the data has tended to do in recent months) it would support the case in favour of a summer interest rate hike from the Federal Open Market Committee and could significantly reduce demand for emerging-market currencies like the Rupee.

The US Dollar to Indian Rupee (USD/INR) exchange rate is currently trending in the region of 62.5800, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate is currently trending in the region of 92.8930, the Euro to Indian Rupee (EUR/INR) exchange rate is currently trending in the region of 67.9220