The Indian rupee gained today as signs of stable economic growth in the United States made Forex traders more willing to risk and propped up demand for currencies with higher yield.
The US non-manufacturing Purchasing Managers’ Index rose from 55.2 percent in January to 56.0 percent in February. Analysts have thought that the index would fall a little to 55.0 percent. Other important reports will be released this week, including non-farm payrolls. The payrolls are expected to show stable employment growth.
As it usually happens, positive news increased demand for riskier currencies, including the rupee. Yet domestic fundamentals are not that good for the Indian currency and among negative factors is the rupee’s strength itself. The strong currency is detrimental for India’s export-oriented economy.
USD/INR fell from 54.9255 to 54.6705 and EUR/INR went down from 71.6910 to 71.4062 as of 6:25 GMT today.
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