- Indian Rupee (INR) is edges lower for a fourth day
- Indian equities end flat
- US Dollar (USD) rises versus its major peers
- FOMC rate decision is due tomorrow
The US Dollar Indian Rupee (USD/INR) exchange rate is rising for a fourth straight day. The pair rose 0.01% in the previous session, settling on Monday at 83.56. At 21:00 UTC, USD/INR trades +0.1% at 83.61 and trades in a range of 83.47 to 82.69.
The Indian rupee is edging lower against a stronger USD as domestic equities finish and oil prices edge higher. The Sensex closed 0.04% higher and the Nifty 50 just 0.02%, after a sharp rise last week.
Oil prices rose after OPEC maintained its oil demand forecast for the second half of this year.
Prime Minister Narendra Modi retained all his cabinet ministers in the new government, signaling that he is still in charge despite now relying on a coalition for a majority in parliament. Despite speculation, the new government is reportedly not planning to increase the fiscal deficit target at least in 2024-25 to appease coalition partners.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at +0.11% at the time of writing at 105.26, after gains last week.
The U.S. dollar is extending gains for a third straight day as investors’ attention turns squarely to US inflation data and the Federal Reserve interest rate decision tomorrow.
Economists expect inflation to hold steady at 3.4% year over year in May and 0.1% monthly after rising 0.3% month over month in April.
The Federal Reserve will be keen to see signs that inflation is continuing to cool amid uncertainty over when to start cutting interest rates.
The data comes after Friday’s non-farm payroll report which was much stronger than expected, causing the market to lower rate cut expectations to less than a 50% probability for a September cut
Investors will be watching the FOMC closely as policymakers release updated projections and the revised dot plot, which is likely to be lowered to two dots.
