• Indian Rupee (INR) is falling after gains last week
  • Indian importer demand for USD hits the rate
  • US Dollar (USD) falls versus major peers
  • When will the Fed start to cut rates?

The US Dollar Indian Rupee (USD/INR) exchange rate is rising after falling across last week. The pair fell -0.08% in the previous session, settling on Friday at 83.24. At 12:00 UTC, USD/INR trades +0.10% at 83.37 and trades in a range of 83.23 to 83.42.

The rupee is unable to capitalize on the broadly weaker U.S. dollar, given USD demand from importers, which is keeping the local currency depressed even as the US dollar slumps to its lowest level in two months versus major pairs.

The decline of the Rupee will likely be limited thanks to hopes of more stimulus in China. As expected, the POBC left its lending benchmarks unchanged and injected 80 billion yuan in iniquity. Meanwhile, Chinese alert rates offered further support for the struggling property sector.

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 -0.29% at the time of writing at 103.62, extending losses from last week.

The US dollar fell sharply across the previous week and is extending those gains at the start of the new week.

The greenback came under pressure last week as investors digested weaker-than-expected US data, including cooler-than-expected inflation, which fueled bets that the Federal Reserve could begin cutting rates sooner than initially expected.

US inflation was cooled to 3.2% YoY data showed some weaknesses seeping into the US jobs market and the economy after the Federal Reserve’s aggressive rate hiking cycle.

The market has priced out the risk of further interest rate increases from the Fed and now turns its attention to when the first rate cuts could come.

Futures are pricing in a 30% chance that the Federal Reserve could begin lowering interest rates as early as March next year.

Today, the US economic calendar is quiet. Attentional turn to tomorrow’s FOMC minutes from the November meeting, which could shed more light on the future path for interest rates.