Anna 
The Indian Rupee (INR) experienced a modest decline on Tuesday, influenced by the rebound of the US Dollar (USD). India’s Services Purchasing Managers’ Index (PMI) data for February came in weaker than market expectations, signaling a slowdown in the services sector. The moderation in growth is attributed to softer expansions in business activity, sales, and jobs, contributing to the INR facing some selling pressure and providing a tailwind for the USD/INR pair.
Despite the Services PMI data, India’s Gross Domestic Product (GDP) exhibited resilience, growing at its fastest pace in 18 months. The economy expanded by 8.4% over the same period last year in the October-December quarter. Additionally, high-frequency indicators continue to improve, suggesting robust economic activity. S&P Global Ratings Global Chief Economist, Paul Gruenwald, expressed optimism about global economic growth, foreseeing only modest headwinds for India in the next fiscal year. This positive outlook for the Indian economy might lend support to the INR, potentially limiting the downside of the USD/INR pair.
Market participants are closely monitoring the upcoming US ISM Services PMI for February, scheduled for release on Tuesday. Later in the week, attention will shift to Federal Reserve Chair Jerome Powell’s testimony on Wednesday, ahead of key US labor market data, including Nonfarm Payrolls (NFP), Average Hourly Earnings, and the Unemployment Rate, due on Friday.
As market dynamics unfold, traders are advised to remain vigilant and adapt their strategies to potential shifts in sentiment and economic data releases.
