Indian Rupee is flexing its muscle and continues on its upward trajectory for the second consecutive day ahead of the key Fed interest rate decision. On the currency market, the value of Rupee continued to appreciate by 14 paise settling at 70.76 against the US dollar.
Tuesday’s trading session saw the USD/INR exchange rate fluctuate within the range of 70.96 — 70.76.
During the early Asia trading hours and after the London open, the USD/INR exchange rate was seen quoted within a tight range of 70.70 — 70.88. The dollar index, which gauges the greenback’s strength against a basket of major currencies couldn’t keep its Friday’s gains and lost more territory settling down at 97.52.
In other news, China’s consumer inflation shoots up to an 8-year high, official statistic revealed on Tuesday. China’s CPI inflation surged to 4.5% in November well-above the market consensus of 4.2% and 3.8% previous reading. The acceleration in inflation was assigned to rising food prices. Pork prices in China doubled from a year earlier after it jumped 110% as African swine fever, increased the demand for the Chinese pork.
On the other hand, core CPI inflation excluding food and energy prices remained largely muted.
Meanwhile, currency traders hope for more progress on the ongoing US — China trade talks ahead of the next hike in US tariffs on Chinese goods that is scheduled to hit the financial market on 15 December.
Elsewhere, moving forward the Fed’s interest rate decision would be the focal point for the markets. The market consensus expects the US Federal Reserve to reiterate its stance on halting further cuts, but market participants will look for more hints for the future path of the Fed’s monetary policy.
The domestic benchmark equity index NIFTY 50 closed on a negative tone during Tuesday’s trading session and settled at 11856, registering a -0.68% loss. Year-to-date the Indian stock market has gained 9.15%, benefiting from foreign investment inflow.
During early Asia trading hours, NIFTY 50 was seen quoted almost unchanged at 11865. The Indian 10-year government bond yield was seen quoted at 6.72 versus 6.71 previous closing prices.