The USD/INR pair weakened, reflecting investor uncertainty following the release of mixed Indian PMI data. While the services sector showed resilience with a modest expansion, manufacturing activity struggled, pointing to uneven economic momentum in Asia’s third-largest economy.
Market sentiment leaned toward risk-on assets as the rupee gained ground, buoyed by optimism over India’s services growth, which countered concerns over slowing factory output. This divergence in PMI performance has raised questions about the broader economic recovery, especially amid fluctuating global demand and persistent inflationary pressures.
A softer dollar provided additional support for the rupee, as investors weighed prospects of a less aggressive U.S. Federal Reserve policy. However, concerns over geopolitical tensions and global recession risks tempered enthusiasm, keeping the currency pair in a volatile range.
Analysts anticipate the USD/INR trend to hinge on upcoming inflation data and policy cues from both the Reserve Bank of India and the Federal Reserve. With the mixed PMI figures setting the stage, traders are bracing for heightened volatility in the days ahead.
