• Indian Rupee (INR) rises as domestic equities gain
  • China CPI turns positive
  • US Dollar (USD) eases after strong gains in recent weeks
  • US inflation data due this week

The US Dollar Indian Rupee (USD/INR) exchange rate is falling after booking gains across the previous week. The pair rose +0.3% in the previous week, settling on Friday at 83.00. At 10:30 UTC, USD/INR trades -0.28% at 82.88 and trades in a range of 82.81 to 83.04.

The rupiah is rising amid an upbeat mood in the market, which is supporting riskier assets such as stocks and currencies like the rupee.

Data from China overnight showed that consumer price inflation turned positive and wholesale inflation Cooled at a slower pace, fueling optimism that the economic slowdown in China could be stabilising.

Indian domestic equities are pushing higher, closing in on record highs. The nifty 50 trades up N .5% was the Sensex had risen 0.48% at the time of writing. A rise in financials is helping the indices come close to their record levels.

The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.44% at the time of writing at 104.63, after rising across the previous week, marking the 8th straight weekly gain.

The US dollar is easing lower after strong gains last week as the market mood improves and as investors look cautiously ahead to US inflation data on Wednesday.

A series of stronger-than-expected data from the US over the recent weeks has shown the economy much more resilient than expected. While the market does not expect the Fed to raise interest rates in the September meeting, investors have increased expectations of another rate hike from the Federal Reserve in the November meeting. Or even if the Fed doesn’t hike in again November, the resilient U S economy suggests that the Fed may need to keep interest rates higher for longer to tame inflation.

Inflation data on Wednesday is the main focus for the greenback this week. The data comes ahead of the Federal Reserve interest rate decision meeting next week.