The Indian rupee trades little changed as investors await the US July jobs data, which could influence Federal Reserve decisions and impact currency movements amid global economic uncertainties.
The Indian rupee traded little changed on Friday as markets waited for the U.S. July nonfarm payrolls report, a release that could shape expectations for Federal Reserve policy and, in turn, the dollar’s next move. The USD/INR pair hovered around 95.27 ahead of the data, with investors also weighing weaker private payrolls figures from ADP that suggested the labor market may be cooling.
TD Securities said July ADP employment rose by 44,000, below forecasts, and argued that the monthly and weekly data have both softened over the summer after a strong start to the year. That backdrop has sharpened attention on the official jobs report, which economists expect to show about 80,000 new jobs in July, up from 57,000 in June, while the unemployment rate is seen holding at 4.2%. Average hourly earnings are forecast to rise 0.3% on the month and 3.5% from a year earlier.
Wage growth may matter more than headline payrolls for currency traders, since it feeds into the inflation outlook. The Federal Reserve said in July that it remains concerned about inflation staying above its 2% target, and markets are still pricing in a meaningful chance of a rate increase at the September meeting, according to CME FedWatch.
Oil prices also offered a small tailwind to the dollar against the rupee. Crude has recovered after two weeks of sharp losses as tensions involving Iran-aligned Houthi forces and Saudi Arabia raised concerns about supply disruptions in the Middle East. The MCX August 19 crude contract was up 1.13% at about ₹7,460. Higher oil prices often pressure India’s currency because the country relies heavily on imported energy.
Technically, USD/INR remains slightly soft in the near term while it trades below the 20-day exponential moving average at 95.57. The relative strength index, at 44.6, suggests sellers still have the upper hand, though the pair is not yet deeply oversold. A move back above 95.57 would ease the bearish tone, while support sits at Wednesday’s low of 94.83 and then at 94.15, the June low.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
