- Indian Rupee (INR) is unchanged after losses yesterday
- Inflation jumped to 5.49% in September
- US Dollar (USD) falls versus its major peers
- NY Empie State manufacturing fell -11.9 in October
The US Dollar Indian Rupee (USD/INR) exchange rate is holding steady after yesterday’s losses. The pair fell 0.07% in the previous session, settling on Monday at 84.04. Today, at 16:00 UTC, USD/INR is down 0.01% at 84.03 and traded in a range of 84.02 to 84.07.
The Rupee is unchanged despite a sharp jump in India’s retail inflation for September, prompting economists to push back rate cut expectations into the first half of 2025.
Annual retail inflation was 5.49% in September, its highest level in nine months amid rising food prices. Inflation jumped sharply from 3.65% in August and was well ahead of forecasts of 5.04%.
For now, the data and rising inflationary risks do not favour a December rate cut. February 2025 or even April 2025 could be possible dates for the first cut.
The RBI held interest rates steady at 6.5% for a tenth straight meeting last week but turned its stance to neutral, suggesting that the next move will be a cut.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, is falling 0.19% to trade at 102.88 after strong gains yesterday.
The U.S. dollar is edging lower on Tuesday after but remains near its highest level in over two months as traders assess the economic and monetary policy outlook.
The New York Empire State manufacturing index sank to -11.9 in October, marking a 5-month low, suggesting a contraction in business activity in New York after a positive September.
Looking ahead, this week’s data on retail sales and industrial production will offer more insight into the strength of the US consumer and industrial sectors.
The market is pricing in a nearly 88% chance that the Federal Reserve will cut rates by 25 basis points in November after a 50 basis point reduction in September.
Yesterday, Federal Reserve governor Christopher Waller warned against cutting interest rates too quickly.
