US Nonfarm Payrolls at 172K in May boost Fed rate hike probabilities to 73.8%, pressuring the Indian Rupee.
The Indian Rupee (INR) weakened against the US Dollar (USD) early Monday, with the USD/INR pair climbing to near 95.30. The move follows stronger-than-expected US jobs data, which reinforced expectations for tighter Federal Reserve policy this year.
May’s Nonfarm Payrolls (NFP) surged to 172K, well above the 85K estimate, while April’s figure was revised upward to 179K from 115K. The unemployment rate held steady at 4.3%. The CME FedWatch tool now shows a 73.8% chance of at least one rate hike in 2024, up from 45.2% a week ago.
Rising oil prices, driven by renewed Middle East tensions, added further pressure on the INR. The US Dollar Index (DXY) held near 100.00, its highest level in two months.