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USD/INR GATHERS STRENGTH AHEAD OF INDIAN/US PMI DATA

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  • Indian Rupee edges lower in Tuesday’s Asian session. 
  • Indian foreign inflows and lower crude oil prices might support the INR. 
  • Investors will focus on the Indian August HSBC Services PMI, US ISM Manufacturing PMI, which are due later on Tuesday. 

The Indian Rupee (INR) weakens on Tuesday, pressured by the recovery of the Greenback. The positive Indian equity market, the inflow of foreign funds and a decline in crude oil prices could limit the INR’s losses. However, the increased US Dollar (USD) demand by the importer, and safe-haven flows ahead of the key US labor market data, might weigh on the local currency. 

The Indian August HSBC Services PMI will be released on Tuesday ahead of the US ISM Manufacturing PMI. All eyes will be on the US labor market reports on Friday, including the Nonfarm Payrolls (NFP), Unemployment Rate and Average Hourly Earnings for August. The Federal Reserve (Fed) Chair Jerome Powell's comments at Jackson Hole last month have made this Friday's NFP report more significant than usual. A weaker-than-expected outcome could trigger the market to price in a larger rate cut, exerting selling pressure on the USD. 


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