inr-bank-notes - INR
  • Indian Rupee (INR) rises for a fourth straight day
  • Indian inflation is expected to rise to 4.58%
  • US Dollar (USD) falls across the board
  • US CPI data is due

The US Dollar Indian Rupee (USD/INR) exchange rate is falling for a fourth straight session. The pair fell -0.16% in the previous session, settling on Tuesday at 82.39. At 10:30 UTC, USD/INR trades -0.11% at 82.29 and trades in a range of 82.26 to 82.64.

The rupee is capitalizing on the weaker U S dollar as its recovery path continues. However, there is strong support at 82.20-30, so the Rupee could struggle to push beyond there.

Looking ahead, Indian manufacturing data is due to be released and is expected to show a 4.8% year-on-year increase in June, up from 4.2%. Inflation data is also due and is expected to rise to 4.58% from 4.25%.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.14% at the time of writing at 101.45, extending losses from the previous session.

The US dollar has hit a two-month low, extending losses from the start of the week and ahead of the crucial US inflation report.

The US consumer price index is expected to ease to 3.1% year on year in June, down from 4% in May. This would mark the slowest annual increase in inflation since March 2021. However, on a monthly basis, inflation is expected to rise 0.3%. Core inflation which strips out more volatile items such as food and fuel, is expected to cool to 5% from 5.3% marking the third straight monthly decline.

If I just expected to raise interest rates by 25 basis points later this month. However, the data could shed more light on whether the US central bank will hike rates again before the end of the year.

While the Fed has indicated that it will raise interest rates twice between now and 2024, the market is less convinced, pricing in just a 30% probability of a second-rate hike.