- Indian Rupee (INR) falls after gains last week
- Wholesale inflation fell to a two year low
- US Dollar (USD) rises after steep falls last week
- US closed for Martin Luther King Day
The US Dollar Indian Rupee (USD/INR) is rising on Monday after booking losses last week. The pair fell 1.2% in the previous week, settling on Friday at 81.58. At 11:00 UTC, USD/INR trades +0.37% at 81.58.
India’s wholesale inflation (WPI) cooled again in December, falling t its lowest level in two years. Data revealed that WPI dropped to 4.95% year on year last month, below the 5.6% forecast and down from 5.85% recorded in November.
The falling price of vegetables, which dropped 36% year on year, meant that the food price index rise just 2.17.
Falling wholesale inflation is considered a signal that consumer prices could also fall lower in the coming months.
Last week data showed that retail inflation edged down in December and remained within the government’s comfort zone for a second consecutive month.
The US Dollar is rising across the board The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.07% at the time of writing at 102.27 after steep losses of 1.6% last week.
The US dollar is steadying at the start of the new week after steep losses last week, which saw the greenback fall to a seven-month low against its major peers.
The US currency fell sharply last week after data showed that US inflation cooled again in December, raising expectations that the Federal Reserve will slow the pace of rate hikes in the upcoming meetings.
The market is now pricing in a 91% probability of a 25 basis point rate hike in the February meeting and just a 9% chance of a 50 basis point rate hike.
Today the US stock market is closed for Martin Luther King Day, which means that the USD could see light volumes traded.
There is no high-impacting US economic data today looking out across the week, US PPI inflation and retail sales data are likely to catch investors’ attention.