- Indian Rupee (INR) rises after trading flat last week
- WPI cooled to 11.6% in July
- US Dollar (USD) rises after steep losses in Friday
- Bets of a sooner move by the Fed ease
The US Dollar Indian Rupee (USD/INR) exchange rate is ticking a few pips lower at the start of the week. The pair finished flat across the previous week booking neither gains or losses. At 11:00 UTC, USD/INR trades -0.08% higher at 74.17.
Indian annual wholesale price inflation cooled to 11.6% in July from the previous month’s 12.07% helped lower by smaller increases in fuel and food costs. According to the latest government data food prices rose 4.46% in July on the year compared to 6.66% in the previous month.
The data comes after figures last week revealed that retail inflation had also eased lower back within the Reserve Bank of India’s comfort zone between 2% -6%.
Separately oil prices were offering support. Oil slumped lower amid concerns over slowing economic growth in China, the world’s second largest consumer of oil. Chinese retail sales and factory orders came in significantly weaker than forecast, unnerving oil markets.
The US Dollar is a few pips lower versus the Rupee but trades a few pips higher versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.06% at 92.52 after steep losses on Friday.
The US Dollar dropped the most in seven weeks the end of last week after US consumer confidence fell sharply lessening the chances of the Federal Reserve tapering monetary policy.
US consumer morale plunged to the lowest level in almost a decade as Americans grew more concerned over the outlook for the country’s economy, inflation and rising covid cases.
The Michigan preliminary sentiment gauge dropped by 11 points to 70.2, a level last seen in December 2011. This was well below analysts’ estimates.
Less confident consumers are likely to drag on the economy as deteriorating moral often goes hand in hand with consumers reining in spending.
