- Indian Rupee (INR) edges lower
- Domestic equities rise, oil rises
- US Dollar (USD) extends gains for 4th session
- US CPI data in focus
The US Dollar Indian Rupee (USD/INR) exchange rate is heading northwards after mild losses in the previous session. The pair settled -0.07% higher on Monday at 74.43. At 11:00 UTC, USD/INR trades +0.05% higher at 74.47.
The Indian Rupee is slipping lower despite rising domestic equities. Indian shares opened higher on Wednesday boosted by gains in metal stocks. The Nifty 50 trades over 2% higher at the time of writing, adding to 1.2% gains in the previous week.
The mood in the market is broadly upbeat following a record close on the S&P500 in the US overnight.
Separately rising oil prices are keeping gains in the Rupee capped after data revealed that US fuel consumption for 2021 was upwardly revised. Consumption is expected at 8.8 million barrels per day in 2021 up from 8 million last year. US EIA crude inventory data is due later today.
The US Dollar is trading higher across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies trades 0.12% higher at 93.12 marking its fourth straight session of gains.
The US Dollar is extending gains ahead of key CPI inflation data due later, which could provide further clues over the Federal Reserve’s mover towards tapering support.
Analysts are expecting consumer prices to rise 5.3% year on year in July, down very slightly from June’s 5.4% increase, which was the highest level of inflation since 2008. Meanwhile, analysts expect core inflation, which excludes volatile items such as food and fuel to rise by 4.3% annually in July, down from 4.5% in June.
A stronger than forecast reading could boost bets that the Fed will look to taper bond purchases sooner rather than later, with a potential announcement at the Jackson Hole economic forum later this month.