• Indian Rupee (INR) falls after 4 days of gains
  • China exports plunge
  • US Dollar (USD) falls after soft CPI data
  • US PPI data is due

The US Dollar Indian Rupee (USD/INR) exchange rate is rising after four days of losses. The pair fell -0.50% in the previous session, settling on Wednesday at 81.98. At 11:30 UTC, USD/INR trades +0.13% at 82.09 and trades in a range of 81.95 to 82.14.

The Rupee is pausing for breath after a four-day rally. The market mood remains upbeat following softening US inflation, but China trade data raises concerns.

China’s exports fell by the most in three years in June, dropping by a worse-than-expected 12.4% year on year in June after dropping 7.5% in May.  The plunge in exports comes as global growth slows. With exports accounting for around a fifth of the economy and the troubled property sector about a third, the outlook for the Chinese economy is deteriorating.

The US Dollar is rising versus the Rupee but falling against major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.24% at the time of writing at 100.27, extending losses from the previous session.

The US dollar is falling further as investors continued to digest cooler-than-expected US inflation data. US consumer price index eased to 3% year on year in June, down from 4% in May. Expectations had been for inflation to cool to 3.1%.

Meanwhile core inflation, which removes more volatile items such as food and fuel also fell by more than expected to 4.8% annually down from 5.3% and below forecasts of 5%.

The market is still expecting the Federal Reserve to raise interest rates by 25 basis points at the FOMC meeting on 18th – 19th July. However, the market is less convinced that the Federal Reserve hike interest rates again after this month.

Attention now turns to US PPI data which is expected to ease further to 0.4% year on year, down from 1.1%.