- Indian Rupee (INR) rises despite oil remaining near $100 per barrel
- Indian wholesale inflation rises 2.13% YoY
- The US Dollar (USD) is falling versus major peers
- Trump looks to create a coalition to reopen the Strait of Hormuz
The US dollar-to-Indian rupee (USD/INR) exchange rate is falling after gains last week. The pair rose 0.66% in the previous week, settling on Friday at 92.54. At 17:30 UTC on Monday, the pair is down 0.34% to 92.22.
The Indian rupee is rising as investors weigh a mix of economic data and ongoing Middle East tensions that are keeping oil prices elevated.
The rupee has recovered from record lows reached last week, although the upside is likely to remain limited while oil prices stay close to $100 a barrel.
On the data front, India’s unemployment rate fell to 4.9% in February, down from 5% in January. This came below expectations, which had been for unemployment to rise to 5.1%.
On the inflation front, wholesale inflation rose to 2.13% year-on-year in February, up from 1.81% in January. This increase was driven by a 1.85% rise in wholesale food prices and a 4.3% increase in vegetable prices.
The data follows the release of consumer price inflation, which rose to 3.21% in February, still below the RBI’s 4% target midpoint.
The US dollar is falling across the board. The US Dollar Index, which measures the currency against a basket of major peers, is down 0.50% at 99.86, after posting gains last week.
The dollar is easing as market sentiment shows signs of improvement on Monday, with stocks rebounding and Treasury yields falling.
Attention remains firmly on developments in the Middle East and the Strait of Hormuz, as President Trump attempts to form a coalition to reopen the key oil shipping channel.
Looking ahead, the Federal Reserve interest rate decision is due on Wednesday, with no change to rates expected. The focus will be on the Fed’s projections for growth and inflation, as well as the dot plot for clues about the outlook for interest rates. Markets are still pricing in one rate cut by the Fed this year.
