• Indian Rupee (INR) rises, extending gains from last week
  • India’s inflation is set to cool to 4.91%
  • US Dollar (USD) fall against its major peers
  • US treasury yields rose to a 4.5-month high

The US Dollar Indian Rupee (USD/INR) exchange rate is falling after losses last week. The pair fell 0.07% in the previous week, settling on Friday at 83.29. At 19:00 UTC, USD/INR trades -0.04% at 83.26 and trades in a range of 83.23 to 83.33.

The Indian rupee is rising against the weaker U.S. dollar even as Indian consumer price inflation is expected to ease to a five-month low in March.

Indian consumer prices are expected to have cooled to 4.91% last month, but this is still above the Reserve Bank of India’s 4% medium-term target as food price rises remain persistent.

RBI governor Das said last week that food price volatility remains a concern as food price rises have outpaced headline inflation for several months now.

The US Dollar is falling against the Rupee across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at -0.21% at the time of writing at 104.14 after a modest loss across the last week.

The US dollar is falling lower, giving back earlier gains as U.S. Treasury yields rise to a 4-1/2 month high.

Yields rose after strong data last week, including the US jobs report, which saw investors question the Fed’s ability to cut interest rates this year.

The US nonfarm payroll report on Friday showed a robust jobs market where 300k jobs were added well above the 200k the analysts had penciled in. Meanwhile, US manufacturing activity data also returned to growth unexpectedly, again highlighting the strengthening of the U.S. economy.

After the data, the markets pushed back expectations of a June rate cut to just 49%, down from 58% a week earlier.

Ahead, there is no high-impacting data due today. Attention will be on Minneapolis Fed President Neel Kashkari, who is due to speak. When Mr Kashkari spoke last week, he raised doubts over the Fed’s ability to cut interest rates at all this year if inflation remains sticky.

Inflation data will be released on Wednesday and is expected to take higher to 3.4%, up from 3.2%