- Indian Rupee (INR) is falling after losses last week
- Chinese trade data was stronger than expected
- US Dollar (USD) is rising versus major peers
- US CPI data is due tomorrow
The US dollar-to-Indian rupee (USD/INR) exchange rate is rising, adding to last week’s gains. The pair rose +0.38% in the previous week, settling on Friday at 85.82. At 20:30 UTC, USD/INR trades 0.18% higher at 85.91 and traded in a range of 85.79 to 86.03.
The Indian Rupee is falling despite stronger than I expected Chinese trade data and as India’s wholesale price index fell for the first time in 19 months in June.
Indian wholesale price index fell 0.13% annually in June, primarily due to the decline in prices of food items, oil, and energy.
Meanwhile, data from China was also stronger than expected, with Chinese exports jumping 5.8% in June. Meanwhile, imports grew 1.1%, rising for the first time this year, reversing the trend of falling imports. Attention will now turn to China’s GDP data due to the growth slowdown, which is expected to show that growth slowed in Q2 to 5.1% annualised from 5,4% in Q1.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.25% to 98.11, marking the sixth straight day of gains.
The US dollar is pushing higher, adding to strong gains last week, as the market is becoming increasingly immune to trade tariffs headlines.
Over the weekend, Trump threatened 30% tariffs on imports from Mexico and the European Union starting August 1st after weeks of failed negotiations.
Attention is now turning to U.S. consumer price inflation data tomorrow, which is expected to show that headline inflation increased to 2.7% on an annual basis, up from 2.4% the previous month. Core inflation is expected to rise 3% from 2.8%.
Federal Reserve Chair Jerome Powell has been warning that he expects inflation to increase over the summer as a result of trade tariffs, which is why the central bank is keeping rates unchanged until later in the year.