October 4, 2024
New Delhi, India
USDINR Price
The Indian Rupee (INR) managed to recover some lost ground on Friday, despite headwinds such as rising crude oil prices, foreign portfolio investor (FPI) outflows, and a weaker regional currency trend. The local currency showed resilience even as the HSBC India Services PMI data for September revealed a decline to 57.7, down from 60.9 in August, and falling short of market expectations of 58.9.
Key Highlights:
- HSBC India Services PMI:
The PMI for September dropped to 57.7 from August’s 60.9, signaling a slowdown in the services sector. Despite this, the INR remained steady against the US Dollar in early trading during the European session. - Crude Oil Prices and FPI Outflows:
The ongoing geopolitical tensions in the Middle East have contributed to a rise in crude oil prices, placing additional pressure on the INR. Simultaneously, significant outflows from domestic equities have weighed on the currency.
Global Impact:
- US Employment Data in Focus:
Investors are closely watching the US Nonfarm Payrolls (NFP) and Unemployment Rate reports, which are due later on Friday. The US economy is expected to add 140,000 jobs in September, while the Unemployment Rate is projected to remain unchanged at 4.2%. A weaker-than-expected outcome could place downward pressure on the US Dollar (USD), offering support to the INR. - Initial Jobless Claims and US Services PMI:
The US Initial Jobless Claims for the week ending September 28 rose to 225,000, missing market expectations. However, the US Services PMI climbed to 54.9 in September from 51.5 in August, surpassing forecasts of 51.7, which provided some strength to the USD.
Looking Ahead:
With global and domestic factors influencing the currency market, the Indian Rupee is expected to remain sensitive to movements in crude oil prices, FPI flows, and the upcoming US employment data. Additionally, the World Bank’s latest report highlights India’s strong economic growth but emphasizes the need for India to diversify its export basket to reach its $1 trillion merchandise exports goal by 2030.
Disclaimer:
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