May 2, 2023
New Delhi, India
USD/INR Today
The USD/INR pair dipped after India’s HSBC Manufacturing PMI for April slightly missed expectations, while the US Federal Reserve’s dovish stance added pressure on the Greenback.
Indian Rupee Remains Strong Amid Softer Dollar
On Thursday, the Indian Rupee (INR) continued to exhibit strength against the US Dollar (USD), bolstered by a softer USD. India’s HSBC Manufacturing PMI for April dropped to 58.8, slightly below the expected 59.5. Despite this, the INR maintained its robust position.
Fed Chair Powell’s Comments Impact USD
Federal Reserve Chair Jerome Powell’s remarks during the recent press conference contributed to the USD’s decline. Powell emphasized the unlikelihood of a rate hike in the near future, leading to a modest dovish reaction in the markets. However, the Fed’s cautious stance on future rate cuts and its higher-for-longer rate narrative could potentially lift the USD in the future.
Impact of Indian PMI Data Release
India’s manufacturing sector remained strong in April, supported by robust demand conditions. Although the HSBC final India Manufacturing PMI declined slightly from the previous month, it remained comfortably above the neutral mark of 50.0. This data release prompted a recovery in the INR, despite the softer USD.
Upcoming US Economic Data
Investors are closely monitoring US economic data releases, including the weekly Initial Jobless Claims and March’s Goods Trade Balance. Attention will turn to the US employment data for April, which includes the highly anticipated Nonfarm Payrolls (NFP) report, Unemployment Rate, and Average Hourly Earnings.
Conclusion
USD/INR experienced a slight downturn following the release of India’s HSBC Manufacturing PMI data for April, which showed a marginal slowdown in the manufacturing sector. While the INR remained strong against the USD, the Fed’s dovish stance could potentially influence future movements in the currency pair.
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