• Indian Rupee (INR) after losses last week
  • CPI is expected to tick higher in January
  • US Dollar (USD) rises ahead of tomorrow’s inflation report.
  • There is no high impacting US data today

The US Dollar Indian Rupee (USD/INR) exchange rate is rising at the start of the week after booking gains across the previous week. The pair rose +0.37% last week, settling on Friday at 82.51. At 10:00 UTC, USD/INR trades +0.25% at 82.71 and trades in a range of 82.58 to 82.77.

The Indian rupee is falling at the start of the week in risk of trade as investors worry about rising US-China tensions after additional objects were shot down near US territory. However, US military general recently dialed back these fears saying we have no reason to think the latest objects are Chinese.

Attention is now on Indian retail inflation, which is expected to have risen to 5.9% year on year in January, up from 5.72% in December, but still within the RBI’s 2% -6% target range.

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 103.70, building on gains from the previous week. The USD rose 0.7% last week in its second straight week of gains.

The US dollar is heading higher at the start of the week as investors look ahead to the release of keenly awaited U S inflation data on Tuesday, which could shed more light on the Federal Reserve’s future path for rate hikes.

While inflation is expected cool, the market is jittery that it may not cool by as much as expected and it also comes after Federal Reserve policy markers stuck to a hawkish tone in speeches last week.  Philadelphia Federal Reserve President Patrick Harker was the latest Fed official to push back on expectations of a rate cut in 2024.

There is no high-impacting US economic data due to be released today so sentiment is likely to drive the greenback.