In anticipation of the release of the U.S. monthly jobs report, the Indian rupee declined and was trading at a lower level against the dollar on Friday.
“The Indian rupee declined as it was trading at 82.6525 to the dollar, down from 82.5550 the previous session.”
The USD/INR pair’s support at 82.40–82.50 holding firm is not a great surprise, especially given the impending release of a crucial data point, according to a trader at a private sector bank.
The monthly U.S. non-farm payrolls report is due later today, and according to Reuters polled economists, 200,000 jobs will be added. Investors will be monitoring the unemployment rate and the figure for pay growth in addition to the headline number.
The relevance of the employment report increases in light of this week’s data, which indicated a healthy U.S. labour market. The ISM manufacturing index’s employment component, the private payrolls figure, and the first jobless claims statistics have all shown that the U.S. labour market has so far responded favourably to rate hikes by the Federal Reserve.
Overnight, U.S. yields increased, with the 2-year touching a more than one-month high. About 1% of the dollar index increased.
The data indicators show that the U.S. labour market is still incredibly tight, which raises the likelihood that the Fed will act by its hawkish stance, according to a note from IFA Global Research Academy.
Analysts predict that a stronger-than-expected non-payrolls report will increase the likelihood that the Fed hikes rates by 50 basis points on February 1 rather than downshifting to a 25 basis point increase.