USD/INR edges higher on Trump’s tariff plans
The Indian Rupee weakens in Wednesday’s Asian session.
Trump's tariff threats undermine the INR, but significant inflows and RBI intervention might cap its downside.
The US Core PCE inflation data will be closely watched.
The Indian Rupee (INR) extends its decline on Wednesday. The expectation that Donald Trump might impose high tariffs on imports into the US provides some support to the US Dollar (USD) and weighs on the local currency. Additionally, the cautious stance from the Federal Reserve (Fed) could underpin the USD in the near term.
Nonetheless, the foreign inflows related to the rejig of MSCI's global equity indexes might help limit the INR’s losses. The downside of the Indian Rupee might be capped as the Reserve Bank of India (RBI) might intervene in the foreign exchange market to prevent the INR from depreciating. The US Core Personal Consumption Expenditures (Core PCE) - Price Index for October will be the highlight on Wednesday. Also, the weekly Initial Jobless Claims, Pending Home Sales, the Chicago PMI and Durable Goods Orders will be published.
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