- Indian Rupee (INR) is unchanged after losses last week
- Indian inflation eased to its lowest level since August 2019
- US Dollar (USD) is unchanged despite hawkish Fed comments
- US inflation data is due this week.
The US Dollar Indian Rupee (USD/INR) exchange rate is unchanged on Monday after gains last week. The pair rose 0.18% in the previous week, settling on Friday at 83.94. At 19:00 UTC, USD/INR trades -0.01% at 83.94 and is in a range of 83.89 to 83.97.
The Indian rupee is unchanged despite several data points being released and $2.4 billion being wiped off Adani shares.
Indian retail inflation cooled to a five-year low of 3.54% in July, down from 5.08% in June, marking the lowest level since August 2019. This was below the 3.65% that economists had expected and a significant decline from July last year when inflation hit a 15-month high of 7.44%. Food prices, which account for around half of retail inflation, rose 5.4% in July, down from 9.36% in June.
On the data front, India’s industrial output increased 4.2% year over year in June. This was less than the 5.5% expected and also down from the revised 6.2% in May. Meanwhile, manufacturing output increased by 2.6%, down from 3.5% a year ago.
The US Dollar is flat across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades at 0% at the time of writing at 103.14, after booking losses last week, the third straight week of losses.
The U.S. dollar was unchanged at the start of the week after three straight weeks of losses. The greenback remained unchanged despite some hawkish comments from Federal Reserve governor Bowman on Saturday, which pushed treasury note yields higher.
Over the weekend, Fed Governor Bowman said that while there has been progress in lowering inflation in May and June, a welcome development, inflation is still well above the head 2% target level.
The market fully anticipates a 25-basis-point rate cut in the September meeting and a 51% chance of a 50-basis-point rate cut at the same meeting.
This week is crucial for U.S. economic data, with retail sales on Tuesday and US inflation figures on Wednesday. The data could provide more clues about the Fed’s next move and, if too weak, revive recession fears.
