The Indian Rupee may appreciate as US data reinforce the likelihood of an aggressive Fed rate cut.
CME FedWatch Tool suggests the likelihood of a 50 bps rate cut has sharply increased to 41.0%.
India Consumer Price Index increased 3.65% in August, against the expected 3.55% and July’s 3.54% readings.
The USD/INR pair holds its position on Friday following the losses registered in the previous as recent US economic data reinforced the odds of an aggressive rate cut by the Federal Reserve (Fed) next week.
According to the CME FedWatch Tool, markets are fully pricing at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has sharply increased to 41.0%, up from 14.0% a day ago.
India's August retail inflation was slightly higher than economists' expectations on the back of a sharp rise in vegetable prices, Reuters cited government data released on Thursday. Consumer Price Index (CPI) rose 3.65% in August, compared with expected 3.55% and July’s 3.54% readings.
On Thursday, Reuters cited five traders stating that the Reserve Bank of India (RBI) might have intervened in the open markets to prevent the Indian Rupee (INR) from weakening beyond the 84.00 level. Traders await Trade Deficit Government and FX Reserves, USD scheduled to be released on Friday.
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