USD/INR RECOVERS SOME LOST GROUND, EYES ON INDIAN, US CPI DATA
- The Indian Rupee (INR) edges lower on Monday despite the softer USD.
- The RBI is likely to maintain its monetary policy stance as the upside risks to food inflation remain.
- Market players will closely watch the Indian and US CPI inflation data for February, due on Tuesday.
The Indian Rupee (INR) trades on a weaker note on Monday, despite the decline of the US dollar (USD). The mixed US February labor market data on Friday has exerted some selling pressure on the Greenback as it has triggered the possibility of a rate cut in June.
The markets estimate the Indian Consumer Price Index (CPI) inflation for February to ease to 5.02% from 5.10% in January. Analysts believe that the upside risks to food inflation remain, and it should keep the RBI on the sidelines for longer with no urgency to cut rates. This, in turn, might boost the Indian Rupee and act as a headwind for the USD/INR pair.
Investors will keep an eye on India’s CPI inflation and Industrial Production on Tuesday. On Wednesday, the attention will shift to the Wholesale Price Index (WPI) of Food, Fuel and Inflation. On the US docket, the February CPI and Retail Sales will be released on Tuesday and Thursday, respectively.
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