- Indian Rupee (INR) edges lower after losses last week
- Wholesale inflation falls 0.26%
- US Dollar (USD) falls versus major peers but remains near a weekly high
- US NY state manufacturing data is due
The US Dollar Indian Rupee (USD/INR) exchange rate is edging higher after losses last week. The pair rose +0.17% in the previous week, settling on Friday at 83.25. At 10:30 UTC, USD/INR trades +0.02% at 83.27 and trades in a range of 83.21 to 83.28.
India’s wholesale price index pointed to inflation cooling further last month. The index fell -0.26% from a year after falling 0.52% in August and defying expectations of a 0.5% rise.
Food price inflation eased to 1.54% year on year after rising by 5.62% in August, and manufactured product prices also fell 1.34%.
The data comes after Indian retail inflation cooled to a three-month low in September but remained above 4%, the level that the Reserve Bank of India has signalled needs to be met before it would consider easing interest rates.
The Reserve Bank of India kept its lending rate unchanged for the fourth straight month at the latest policy meeting and reiterated that it needed inflation to hit 4% in order to cut rates.
The US Dollar is rising versus the Rupee but falling versus its major peers. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades -0.16% at the time of writing at 106.48, after booking gains across the previous week.
The US dollar is edging lower at the start of the week but remains near a weekly high as fragile sentiment remains amid a backdrop of the conflict in the Middle East.
As the Israel-Hamas conflict ramps up, the US dollar is being supported by safe-haven flows.
The prospect of higher interest rates for longer is also keeping the dollar supported after stronger-than-expected US inflation data last week and as investors look ahead to a speech by Federal Reserve chair Jerome Powell on Thursday.
His comments will come after several policymakers last week hinted that the Federal Reserve may not need to raise interest rates again this year as high treasury yields have done some of the tightening work for the US central bank.
Looking ahead, the economic calendar is relatively quiet, with New York Empire State manufacturing index for October due to be released. Expectations are for a 1.5% fall in October after 1.9% gains in September.
