- Indian Rupee (INR) slips Indian inflation forecast to fall 4.32%
- Indian equities also moved lower
- US Dollar (USD) rises after 3 days of declines vs majors
- US CPI inflation due
The US Dollar Indian Rupee (USD/INR) exchange rate is heading higher on Wednesday, extending gains for a second straight session. The pair settled +0.36% on Tuesday at 74.17. At 10:00 UTC, USD/INR trades +0.29% at 74.37.
India’s retail inflation is expected to remain close to a six-month low in October as higher food and fuel prices were offset by a favourable comparison from a year earlier.
According to a poll by Reuters, 43 economists predicted that consumer price inflation would ease to 4.32% in October, down from 4.35% in September. If so, this would mark the fourth straight month that inflation will remain within the Reserve Bank of India’s 2% -6% comfort zone. Inflation data will be released on 12th November.
Separately, Indian domestic stocks fell lower on Wednesday with banks and resource stocks leading the move lower. The Sensex closed 0.1% lower and the Nifty 50 down -0.15%. Resource stocks fell amid concerns over surging Chinese inflation.
The US Dollar is trading higher across the board on Wednesday. The US Dollar Index, which measures the greenback versus a basket of major currencies trades +0.23% at the time of writing at 94.16, after 3 days of declines.
The US Dollar is on the rise aa investors focus on inflation. US inflation, as measured by the consumer price index is due to be released later today and could shed some light on whether the Fed will move sooner or later to raise interest rates.
US CPI is expected to slip to 5.3% year on year in October down from 5.4%, which is still well over doublet he Fed’s 2% target rate for inflation.
The Fed, last week, re-iterated their belief that high inflation is transitory. However, investors are less convinced. Yesterday PPI data showed that wholesale inflation jumped 8.6% year on year indicating that high inflation was likely to remain.