India’s private sector activity weakened slightly in June as the HSBC Composite PMI fell to 57.1 from May’s 57.4 reading, missing analyst expectations that forecast the index to hold steady at 57.4. The final figures published Friday by S&P Global and HSBC Bank show a modest deceleration in business momentum, though activity remains firmly in expansion territory above the 50.0 threshold. The data reflects combined performance across manufacturing and services sectors, which employ millions and drive significant foreign exchange flows.
Traders and brokers should monitor the Indian Rupee closely as softer-than-expected PMI data typically pressures emerging market currencies. While the 57.1 reading still signals robust growth, the downward revision suggests economic momentum may be cooling after recent strength. Currency markets may price in reduced rate hike expectations from the Reserve Bank of India if this trend continues.
FXnCO Insight
INR positions face near-term headwinds as missed PMI estimates could trigger profit-taking among traders who positioned for continued expansion strength.
Source: FXStreet