- Indian Rupee (INR) weakens despite rising domestic equities
- Indian industrial production &inflation in focus
- US Dollar (USD) rebounds after steep falls at the end of last week
- US inflation & Fed Jerome Powell in focus this week
The US Dollar Indian Rupee (USD/INR) exchange rate is heading higher on Monday trading approximately flat across the previous week. The pair shed 0.04% last week, settling on Friday at 74.48. At 16:40 UTC, USD/INR trades +0.12% lower at 74.57.
The Indian Rupee is edging lower at the start if the week, despite a rise in domestic equities and as investors look ahead to the release of CPI inflation data. Asian stocks markets were boosted by US stocks hitting an all-time high on Friday and by policy easing in China as growth slows.
The focus now turning towards Indian industrial production and inflation data which is due later. Industrial production is expected to rise 32% year on year in May, after surging 134.4% in April on favourable comparisons.
Inflation is expected to rise in 6.58% year on year in June, up from 6.3% in May. This would mark a 7 month high for inflation owing to rising food prices and fuels prices. This would mean that inflation remains above the Reserve Bank of India’s comfort zone for a second straight month.
The US Dollar is pushing higher across the board on Monday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.17% at the time of writing at 92.29, rebounding after falling sharply lower at the end of last week.
The US Dollar posted strong gains across most of last week amid safe haven flows as covid cases ticked higher, particularly in Asia. However, the greenback fell sharply lower at the end of last week as US treasury yields tumbled to the lowest level in 4 months.
At the start of the new week attention is shifting back towards US inflation and the Federal Reserve. US consumer price index is due to be released tomorrow, PPI wholesale inflation is due on Wednesday and Federal Reserve Chair Jerome Powell is due to testify before Congress on Wednesday and Thursday.