After falling to fresh record lows against the US Dollar last week, the Rupee remains weaker today as a further piece of decidedly unimpressive economic data for India added to investor’s concerns and lessened the appeal of the nation’s assets.
The US Dollar to Indian Rupee Exchange Rate was in the region of 65.9200 as of 11:40 GMT
India’s manufacturing PMI slipped from 50.1 in July to 48.5 in August, taking the gauge below the 50 mark separating growth from contraction.
In the manufacturing report chief economist Leif Eskesen commented: ‘Manufacturing activity contracted in August for the first time since March 2009. This was led by a decline in new orders, especially export orders. Together with a draw-down in finished goods inventories, this led to a drop in output.’
The US Dollar to Rupee (USD/INR) exchange rate hit a high of 66.3000
However, Eskesen also added: ‘Encouragingly, input and output price inflation slowed despite the weakening of the currency, which likely reflects the softening demand conditions and, therefore, declining pricing power. Notwithstanding the weak growth backdrop, the RBI will likely keep its liquidity tightening measures in place for a while still to help contain the depreciation of the currency. Combined with the heightened macroeconomic uncertainty this will continue to weigh on growth in coming months.’
The result prompted this response from currency strategist Sacha Tihanyi; ‘The fact that growth momentum has waned so significantly, yet not enough to ameliorate the external deficit is particularly worrying. It simply underscores the very, very worrying position that India’s policymakers find themselves in.’
Last Wednesday the Rupee sank to a historic low of 68.85 against the US Dollar. After today’s data was published the Indian asset was trading in the region of 65.9200, and with Raghuram Rajan taking over as Governor of the Reserve Bank of India on Thursday additional Rupee volatility is likely.
HSBC service PMI for India, due out on Wednesday, is this week’s other influential piece of domestic news.
The Rupee was also softer against the Pound today as the British currency advanced on its peers following the release of better-than-expected UK housing and manufacturing reports.
Current Rupee (INR) Exchange Rates:
< Down > Up
The Pound Sterling/ Indian Rupee Exchange Rate is currently in the region of: 102.6840 >
The Euro/Indian Rupee Exchange Rate is currently in the region of: 87.1661 <
The US Dollar/Indian Rupee Exchange Rate is currently in the region of: 65.9200 <
The Australian Dollar/Indian Rupee Exchange Rate is currently in the region of: 59.2817 >
The New Zealand Dollar/Indian Rupee Exchange Rate is currently in the region of: 51.5597 >
The Canadian Dollar/Indian Rupee Exchange Rate is currently in the region of: 62.6531 <
(Correct as of 11:40 GMT)
Comments are closed.