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US Dollar to Indian Rupee Exchange Rate Strengthens on GDP Data
Published: 27 Nov at 12 PM Tags: Dollar Exchange Rate, Forex, Rupee Exchange Rate, UK, Economy,
The US Dollar advanced against the Indian Rupee after Gross Domestic Product (GDP) data came in better than forecast and showed that the world’s largest economy is fending off threats from slowdowns in the wider global economy.
According to the Washington based Commerce Department, the US economy expanded at an annual rate of 3.9% in the third quarter of 2014, beating economist expectations for a figure of 3.3%. A Preliminary GDP report suggested that the US economy grew at a pace of 3.5% in the third quarter. The better than expected data adds to the 4.6% growth figure recorded in the second quarter.
As a result of the positive report expectations increased that, the Federal Reserve could begin to increase interest rates in mid 2015. Interest rates in the USA have remained close to 0% since December 2008.
‘Janet Yellen will rightfully be thrilled with the growth seen since the last release of data, which defied expectations and nearly broke through the magical four per cent mark. US consumers have many things in their favour at present. Retailers will rightfully be bullish ahead of the traditional holiday shopping kick-off event Black Friday, as remarkably low gasoline prices fill the pockets of consumers with unexpected cash. The question remains, can retailers keep the tills ringing in the run-up to the holidays if OPEC announces a cut in productions on Thursday?’ said Dennis de Jong a managing director at a forex broker.
The report also showed that growth in domestic demand was revised upwards to a reading of 3.2% in the third quarter instead of the previously reported 2.7% pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 2.2 % pace instead of the previously reported 1.8%. Growth in business investment was raised to a 7.1% pace from a 5.5 percent rate, with a stronger pace of spending on equipment than previously thought accounting for the bulk of the revision.
The Indian Rupee meanwhile was softer as emerging market assets came under pressure from concerns over the strength of the global economy.
The Rupee is likely to recover ground midweek as tumbling oil prices are expected to improve the Asian nation’s Current Account deficit.
In the second quarter of the year, India recorded a current account deficit of $7.8 billion. In the first quarter, the deficit was at a $1.2 billion.
According to the Washington based Commerce Department, the US economy expanded at an annual rate of 3.9% in the third quarter of 2014, beating economist expectations for a figure of 3.3%. A Preliminary GDP report suggested that the US economy grew at a pace of 3.5% in the third quarter. The better than expected data adds to the 4.6% growth figure recorded in the second quarter.
As a result of the positive report expectations increased that, the Federal Reserve could begin to increase interest rates in mid 2015. Interest rates in the USA have remained close to 0% since December 2008.
‘Janet Yellen will rightfully be thrilled with the growth seen since the last release of data, which defied expectations and nearly broke through the magical four per cent mark. US consumers have many things in their favour at present. Retailers will rightfully be bullish ahead of the traditional holiday shopping kick-off event Black Friday, as remarkably low gasoline prices fill the pockets of consumers with unexpected cash. The question remains, can retailers keep the tills ringing in the run-up to the holidays if OPEC announces a cut in productions on Thursday?’ said Dennis de Jong a managing director at a forex broker.
The report also showed that growth in domestic demand was revised upwards to a reading of 3.2% in the third quarter instead of the previously reported 2.7% pace. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 2.2 % pace instead of the previously reported 1.8%. Growth in business investment was raised to a 7.1% pace from a 5.5 percent rate, with a stronger pace of spending on equipment than previously thought accounting for the bulk of the revision.
The Indian Rupee meanwhile was softer as emerging market assets came under pressure from concerns over the strength of the global economy.
The Rupee is likely to recover ground midweek as tumbling oil prices are expected to improve the Asian nation’s Current Account deficit.
In the second quarter of the year, India recorded a current account deficit of $7.8 billion. In the first quarter, the deficit was at a $1.2 billion.
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Source: moneytransfer.co.uk