Indian Rupee trades with a mild negative bias on Monday.
The market expects the FOMC to keep rates at 5.25–5.50% unchanged at its January meeting.
India’s Interim Budget 2024 for fiscal year 2024-25 will be released on Thursday.
Indian Rupee (INR) loses traction on Monday amid the rebound of the US Dollar (USD). INR is expected to have a quiet session on Monday as traders turn to cautious mode ahead of the Federal Open Market Committee (FOMC) policy meeting and the presentation of India's federal budget later in the week.
The US Dollar and US bond yields have benefited from strong economic data in the United States and a decreasing bet on aggressive rate cuts by the Fed. Additionally, the ongoing geopolitical tension in the Middle East helps boost demand for safe-haven currencies like the Greenback and acts as a tailwind for the USD/INR pair.
The Federal Open Market Committee (FOMC) January meeting on Wednesday will be a closely watched event. Investors widely anticipate the FOMC to maintain the status quo. Investors will closely watch the press conference following the meeting. If Fed Chairman Jerome Powell hints at a probable rate cut in March, the Greenback may see some selling pressure.
Indian Finance Minister, Nirmala Sitharaman, will present the Interim Budget 2024 for fiscal year 2024–25 on Thursday as part of the Parliament’s Budget session. Budget 2024 is set to focus on initiatives that will help India maintain its growth trajectory towards a $5 trillion economy
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