- Indian Rupee (INR) eases after losses last week
- China retail sales & industrial output beat forecasts
- US Dollar (USD) rises versus its major peers
- FOMC rate decision is due on Wednesday
The US Dollar Indian Rupee (USD/INR) exchange rate is rising modestly after gains last week. The pair rose 0.17% in the previous week, settling on Friday at 82.88. At 15:00 UTC, USD/INR trades +0.3% at 82.95 and trades in a range of 82.84 to 82.92.
The Indian rupee is weakening along with its Asian peers after mixed data from China.
Chinese industrial production and retail sales were stronger than expected, lifting some optimism around the economic recovery. Investors are still cautious as the property sector is a cause for concern.
Chinese industrial production rose 7% year on year, rising from 6.8% and defying expectations of a fall to 5%. Retail sales rose 5.5% down from 7.4% previously, ahead of the 5.2% forecast.
Meanwhile, property investment fell by 9%, highlighting the concerns surrounding one of China’s critical sectors, which is a key economic pillar.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.05% at the time of writing at 103.48 building on last’s week’s gains.
The US dollar is heading higher, adding to gains from the previous week, as investors await the Federal Reserve’s interest rate decision on Wednesday.
The US dollar pushed higher last week, boosted by expectations that the Federal Reserve could keep interest rates high for longer. Data last week showed that both consumer prices and producer prices were stickier than expected.
The Fed is not expected to cut interest rates in the March meeting; however, they could adopt a more hawkish tone, and there is a possibility of the central bank downgrading its interest rate forecast or dot plot to two rate cuts this year rather than three, which was forecast in December. This would boost the U.S. dollar against its peers and would encourage the US rate markets to further scale back fed rate cut expectations.
