• Indian Rupee (INR) trades quietly amid public holidays in Asia
  • Indian retail inflation cooled to a 3-month low
  • US Dollar (USD) rises, adding to 4-weeks of gains
  • US inflation data in focus this week

The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady after remaining unchanged in the previous week. The pair was flat at 0% in the previous week, settling on Friday at 83.00. At 14:00 UTC, USD/INR trades +0.02% at 83.01 and trades in a range of 82.89 to 83.10.

The Indian Rupee, along with other Asian currencies, trades quietly due to public holidays in most Asian markets.

On the data front, India’s industrial production rose 3.8% year on year amid a pick-up in manufacturing activity. This was ahead of the 2.4% economists had estimated and the 2.4% in the previous month.

Separately, Indian retail inflation eased to a 3-month low in January, dropping to 5.1% as the price of some food items rose more slowly. However, the Reserve Bank of India is not expected to cut interest rates soon, as inflation remains above target.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.06% at the time of writing at 104.18, after gains across the past 4-weeks.

The USD is pushing higher in a relatively quiet start to a week, which could ramp up with all eyes on US inflation data, which could provide more clues on when the Federal Reserve may start to cut interest rates.

The USD has rallied over the past few weeks after robust US non-farm payroll data saw the market dial back expectations of a March rate cut, with a May rate cut looking more likely. The market is pricing in a 60% probability of at least a 25 basis point cut in May.

Today, there is no high-impacting US economic data. Instead, attention will be on Federal Reserve officials, who are due to speak. Dallas Fed President Lorrie Logan said over the weekend that there was no rush to cut rates and that the Fed should wait for more data to ensure that inflation is cooling to the 2% target.