8 Jan 2024

USD Rises on Strong Job Data, INR Gains Amid GDP Growth

The USD strengthened on robust U.S. job data, with nonfarm payrolls surpassing expectations. Federal Reserve watches for rate-cut possibilities. INR gained despite fluctuations, supported by India's projected 7.3% GDP growth.

author dp
Team INRBonds
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  • The USD ended the week higher against major world currencies as the U.S. economy added far more jobs than expected in December.
  • The job report will be closely watched by Fed officials as they weigh the possibility of rate cuts in the coming months.
  • U.S. nonfarm payrolls increased by 216,000 last month, rising from a downwardly revised figure of 173,000 in November and surpassing the expected 170,000 jobs, according to figures from the Bureau of Labor Statistics released on Friday.
  • The unemployment rate came in at 3.7%, matching the pace registered in the prior month and slightly below the expected 3.8%. Average hourly earnings, meanwhile, grew by 0.4% on a month-on-month basis, marginally faster than projections of 0.3%, and equal to the rate posted in November.
  • U.S. jobless claims were also stronger than expected, rising by 202,000 after an upwardly revised 220,000 last week – the lowest number since October – pointing to tightness in the labor market.
  • The INR ended the week higher despite exhibiting weakness for most of the week.
  • The gains in INR came as India's gross domestic product (GDP) is estimated to grow by 7.3% in 2023-24, up from 7.2% in 2022-23, according to the advance estimate released by the Ministry of Statistics on Friday.

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