- Indian Rupee (INR) rises amid risk-on trade
- IMF sees resilience in the global economy
- US Dollar (USD) falls ahead of key data
- US PPI & retail sales are due
The US Dollar Indian Rupee (USD/INR) exchange rate is falling on Wednesday after finishing flat in the previous session. The pair settled unchanged on Tuesday at 81.63. At 11:00 UTC, USD/INR trades -0.3% at 81.41 and trades in a range of 81.27 – 81.82.
The Rupee is seen rising against the US dollar tracking domestic equities higher. Indian shares have risen to a weekly high on Wednesday, boosted by gains in financials and metals.
Risk assets are performing well on Wednesday after upbeat comments from the International Monetary Fund’s number 2 Gita Gopinath, said that there are signs of resilience in the global economy. Her comments were made at the World Economic Forum in Davos.
Chinese vice President Liu He also sounded cautiously optimistic regarding the growth outlook for China.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.3% at the time of writing at 102.08 recouping losses from the previous session.
The US dollar is falling as investors look ahead to the release of key US economic data later today. Investors will be looking toward US wholesale inflation as measured by the producer price index. PPI is expected to cool in December two 6.8% year on year, down from 7.4% in November.
PPI is often considered a lead indicator for consumer price inflation sigh cooling PPI would suggest that CPI would also continue cooling.
US retail sales will also be under the spotlight and are expected to fall -0.8% month on month after declining -0.6% month on month in November, the worst weekly decline in almost a year. A weaker consumer and cooling inflation could both support the view that the Federal Reserve could slow the pace of rate hikes in the coming meetings, which could pull the US dollar lower.