- Indian Rupee (INR) boosted in risk on trade
- Indian inflation expected to hit 4.38% in February
- US Dollar (USD) falls as inflation misses forecasts & jobless claims drop
- US bond market calms
The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower for a third straight session on Thursday. The pair settled -0.1% lower on Wednesday at 72.72. At 11:45 UTC, USD/INR trades -0.1% at 72.64.
Risk on trading is helping the Rupee rise versus the safe haven US Dollar. Riskier currencies and equities have pushed higher as the mood in the market improved.
Data wise India’s inflation is thought to have risen in February as food and fuel prices picked up. However, inflation is expected to remain within the Reserve Bank of India’s target range for a third straight month.
According to a poll of 50 economists retail inflation is expected to have risen to 4.38% in February up from 4.06% the previous month. No economist expected inflation to rise above the central banks upper limit of 6%.
Inflation data will be released tomorrow together with manufacturing and industrial production.
The US Dollar is trading lower versus its major peers on Thursday. The US Dollar Index which measures the greenback versus a basket of major peers trades -0.3% at 91.55 at the time of writing, marking its third straight day of losses.
US jobless claims fell to the lowest level since the pandemic started registering. 712,000 Americans signed up for unemployment benefit last week, this was below the 725,00 that analysts had been expecting. The data shows that the recovery in the labour market remains on the right track.
The data came following calming numbers yesterday. US core inflation rose a less than expected 0.1% month on month in February. Meanwhile core CPI rose 1.3% on an annual basis which was also short of forecasts. The data has calmed runaway inflation expectations which had been building.
A successful US 10 year bond auction also calmed the mood in the bond market helping the US Dollar lower. Demand in the auction was sufficient to drive down yields. High yields had lifted the US Dollar to multi-month highs in recent weeks.