USD/INR weakens ahead of Indian CPI inflation release
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The Indian Rupee gains momentum in Monday’s Asian session. The likely RBI intervention supports the INR; firmer USD, foreign outflows, higher oil prices might weigh on the local currency. India’s December CPI inflation data will be the highlight on Monday. The Indian Rupee (INR) recovers some lost ground on Monday after reaching a record low in the previous session. The routine interventions by the Reserve Bank of India (RBI) by offering US Dollar (USD) might have helped limit the INR’s losses. The stronger-than-expected US employment data on Friday reinforced expectations that the US Federal Reserve (Fed) might not cut interest rates as aggressively this year. This, in turn, might provide some support to the Greenback and exert some selling pressure on the local currency. Additionally, heavy outflows from domestic equities, hawkish remarks from the Fed and a rise in crude oil prices could drag the INR lower, as India is the world’s third-largest oil consumer. Later on Monday, traders will keep an eye on India’s Consumer Price Index (CPI), which is expected to show an increase of 5.3% YoY in December. On the US docket, the Monthly Budget Statement will be released. Indian Rupee rebounds, upside potentially limited as RBI might ditch quasi-peg The Indian Rupee may fall past 90 per Dollar this year as the monetary authority prepares to ditch the currency’s implicit quasi-peg to the USD, according to Gavekal Research. The US Nonfarm Payrolls (NFP) rose by 256K in December, compared to a 212K increase (revised from 227K) seen in November, according to the US Bureau of Labor Statistics (BLS) on Friday. This reading came in stronger than the 160K expected by a wide margin. The Unemployment Rate in the US ticked lower to 4.1% in December from 4.2% in November. The Average Hourly Earnings declined to 3.9%…
Filed under: News - @ January 13, 2025 3:25 am