The Indian rupee is expected to open weaker on Friday, weighed down by renewed strength in the U.S. dollar after a robust American jobs report signaled continued resilience in the U.S. labour market.
The 1-month non-deliverable forward (NDF) indicates the rupee may open in the 85.46–85.50 range against the U.S. dollar, compared to 85.31 in the previous session.
“The 85.30 level is a key support for USD/INR,” said a currency dealer at a Mumbai-based bank. “The U.S. jobs data has only reinforced the view that it’s unlikely to break below this level soon. The broad dollar recovery and higher Treasury yields have created a firm floor.”
On Thursday, U.S. non-farm payroll data revealed that job additions in June exceeded expectations, while the unemployment rate unexpectedly declined, pointing to sustained labour market strength. In response, Treasury yields climbed, supporting a broad-based rally in the U.S. dollar and prompting markets to scale back expectations of an interest rate cut by the U.S. Federal Reserve in its upcoming July meeting.
“This is a rare piece of good news for the U.S. dollar,” said Richard Potts, economist at FX advisory firm Bondford. “The strong data reduces the likelihood of a Fed rate cut this month, thereby preserving the U.S. yield advantage over other major economies.”
Earlier this week, Fed Chair Jerome Powell had signaled that a July rate cut was still on the table—an indication that had initially weakened the dollar. However, the latest jobs data has reversed market sentiment.
In other developments, the Republican-controlled House of Representatives narrowly passed U.S. President Donald Trump's latest tax and spending bill, which is expected to add $3.4 trillion to the country's existing $36.2 trillion debt.
Commenting on the fiscal policy implications, Chris Weston, Head of Research at broker Pepperstone, said: “The key question now is how much of the bill’s passage was already priced into markets.” He added that the longer end of the Treasury curve should be monitored for any rise in term premium before making definitive market calls.
