- Indian Rupee (INR) gains for a fourth day
- The RBI cut rates by 50 bps on Friday
- US Dollar (USD) rises versus major peers
- US CPI data is due tomorrow
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling for a fourth straight day. The pair fell -0.14% in the previous session, settling on Wednesday at 85.67. At 19:30 UTC, USD/INR traded -0.11% lower at 85.57 and traded in a range of 85.49 to 85.67.
The Indian rupee is advancing as Indian and US negotiators make progress in the latest round of trade talks. The two sides are moving towards a bilateral trade deal after focusing on market access for industrial and agricultural goods.
The two sides are expected to sign an interim trade agreement by the end of the month, before Trump’s 90-day pause on reciprocal tariffs, which included a 26% tariff on Indian goods, expires.
On Friday, the Reserve Bank of India cut its key repo rate by a larger than expected 50 basis points and flash banks’ cash reserve ratios by 100 basis points. The RBIs, the aggressive monetary easing, is an attempt to revive consumption and investment in the world’s fifth-largest economy.
The US Dollar is falling against the Rupee but rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is rising 0.12% to 99.05 after yesterday’s losses.
The US dollar is trading higher across the day but has eased back from earlier highs, based on the prospect of a positive outcome from the ongoing US-China trade talks on Tuesday.
However, the market is still cautious ahead of tomorrow’s US inflation data and this week’s treasury auctions, where weak demand could pull the US dollar lower.
US inflation as measured by the consumer price index is expected to rise 2.5% year on year up from 2.3%. Core inflation is expected rise to 2.9% from 2.8%. Hot inflation could see the market push back Federal Reserve rate cut expectations.
