USD/INR: Rupee off six-week low after smaller-than-expected NFP growth

Key points

India’s Rupee was mostly steady against the US Dollar on Monday, following a 0.2% gain last Friday on the back of smaller-than-expected Non-Farm Payrolls growth in June.

The US economy created 209,000 job positions in June, after a revised down 306,000 growth in May, while falling short of market consensus of 225,000. It has been the slowest jobs growth rate since December 2020.

Still, the jobs data miss did not affect Fed rate hike expectations.

The employment report also revealed a strong wage growth, indicating tight labor market.

“Despite the slower job growth, robust wage growth and the slight decline in the unemployment rate are likely to keep the Fed on track to raise interest rates in their upcoming July meeting,” OCBC Treasury Research wrote in a client note, cited by Reuters.

Investor focus now sets on US CPI inflation figures for June, due out on Wednesday. Rupee traders will also pay close attention to India’s CPI inflation numbers, also due on Wednesday.

The yield on Indian 10-year bonds was at 7.1639%, while that on US 10-year Treasuries – at 4.068%.

The US Dollar Index was last up 0.11% to 102.383, after losing almost 1% on Friday.

As of 7:20 GMT on Monday USD/INR was inching up 0.01% to trade at 82.5950. Last week, the exotic Forex pair went up as high as 82.7900. The latter has been the pair’s strongest level since May 24th (82.8610).