inr-bank-notes - INR
  • Indian Rupee (INR) rose on bond index inclusion optimism
  • Bloomberg to include some Indian bonds in its EM local currency index
  • US Dollar (USD) rises versus major peers
  • Hawkish Fed comments boost USD

The US Dollar Indian Rupee (USD/INR) exchange rate is rising after losses yesterday. The pair fell 0.18% in the previous session, settling on Monday at 83.04. At 10:00 UTC, USD/INR trades +0.06% at 83.09 and trades in a range of 83.02 to 83.13.

The Indian rupee is falling against the stronger U.S. dollar after gains in the previous session. The rupee rose yesterday thanks in part to the proposal to include eligible Indian bonds in the Bloomberg emerging market local currency index.

Bloomberg index services proposed to include eligible Indian bonds in this index from September, which comes following JP Morgan’s decision to include India in its emergent market debt index in June.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.12% at the time of writing at 102.33, after losses yesterday.

The US dollar is pushing higher, recovering from losses in the previous session and boosted by hawkish Fed comments.

Atlanta Federal Reserve president Raphael Bostic pushed back on aggressive rate cut bets, saying that whilst inflation is still above 2%, he supports keeping interest rates high.

His comments come as the markets have reined in aggressive Fed rate cut bets at the start of the year. According to the CME fed watch tool, the market is now pricing in a 57% likelihood of a rate cut in March, which is down from 70% at the start of the year.

Looking ahead, attention will be on the economic optimism indicator, which is expected to increase from 40 to 41 for January. However, this data is unlikely to influence bets on Federal Reserve rate cuts.

The focal point this week for Federal Reserve interest rate expectations will come from the inflation report due on Thursday.