- Indian Rupee (INR) rises ahead of CPI data
- Domestic equities rise & oil falls
- US Dollar (USD) falls, extending last week’s losses
- Hopes inflation is set to cool further hurts USD demand
The US Dollar Indian Rupee (USD/INR) exchange rate is falling at the start of the week, extending losses from the previous week. The pair lost -0.1% last week, settling on Friday at 79.63. At 11:00 UTC, USD/INR trades -0.15% at 79.51.
The Rupee is tracking domestic equities higher ahead of inflation data, which could shed more light on the Reserve Bank of India’s next moves.
The Nifty 50 trades 0.7% higher at the time of writing, and the Sensex has risen 0.7% as well, lifted by tech stocks.
Falling oil prices are adding to the upbeat mood toward the Rupee, in light of India’s position as the third largest importer of oil. West Texas Intermediate trades down around 10% lower from early August.
Indian inflation data is due later in the day and is expected to snap a three-month downtrend. Expectations are for consumer prices to rise 6.9% in August up from 6.7% in July.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.93% at the time of writing at 107.97 after steep losses last week.
The US dollar is falling for a fifth straight session as investors continue assessing central bank policies across the globe and as hopes rise that peal inflation in the US has passed.
The USD looked past hawkish comments from Federal Reserve Chair Jerome Powell on last week and other Fed officials on Friday. Instead, the focus has been on US inflation data due to be released tomorrow, which is expected to show that inflation cooled again in August, after dropping to 8.5% in July, down from 9.1% in June.
While the Fed is still expected to hike rates steeply in September, they could start to ease the aggressive stance after that.
There is no high impacting US economic data today and Federal Reserve speakers are now on blackout until the September FOMC next week.