inr-bank-notes - INR
  • Indian Rupee (INR) looks to inflation data
  • Nifty 50 eases from record high
  • US Dollar (USD) rises versus major peers
  • US inflation data is tomorrow

The US Dollar Indian Rupee (USD/INR) exchange rate is edging higher after losses in the previous session. The pair fell -0.16% yesterday, settling on Monday at 82.90. At 10:30 UTC, USD/INR trades +0.01% at 82.91 and trades in a range of 82.87 to 83.00.

The Rupee is showing resilience against the stronger dollar even as domestic equities edge lower. The Nifty 50 has dipped in a volatile trading session as investors book profits after the index hit a record high near the open.

Attention is now turning to Indian industrial production data, which is due shortly and is expected to show that industrial output rose 4.8% annually in July, up from 3.7% in June.

Inflation data will also be under the spotlight, with consumer prices expected to cool to 7% annually in August, down from 7.44% in July. While Indian inflation is expected to cool from the 15-month high in July, it is still set to hold above the Reserve Bank of India’s target rate of 2% to 6% for a second straight month.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.2% at the time of writing at 104.78, reversing losses from yesterday.

The US dollar is pushing higher, reversing some of the sharp losses from the previous session as investors position themselves ahead of tomorrow’s US inflation data.

The US inflation figures are the main focus for this week and are expected to set the tone for the Federal Reserve interest rate decision next week.

The data is expected to show that inflation ticked higher in August, but core inflation, which strips out more volatile items such as food and fuel, cooled.

The Federal Reserve is widely expected to keep interest rates on hold in September; however, signs that inflation is proving to be sticky could feel bets that the Fed will hike rates again in November. Currently, the market is pricing in a 43% probability of the Fed lifting rates again in November.