Indian Rupee edges higher on Monday on the weaker USD.
The optimistic Indian economic outlook and the continuous foreign inflows boost the Indian Rupee.
The US Fed interest rate decision on Wednesday will be in the spotlight.
Indian Rupee (INR) recovers its lost ground on Monday amid the modest decline of US Dollar (USD). The recovery of the INR is bolstered by the positive economic outlook in the Indian economy and the continuous foreign inflows into government bonds. Foreign portfolio investors increased their holdings of Indian government bonds by roughly 50% since the index inclusion news less than six months ago. Nonetheless, the risk-averse environment, higher crude oil prices, and higher US Treasury bond yields might cap the upside of the INR and create a tailwind for the USD/INR pair.
Investors will closely monitor the Fed interest rate decision on Wednesday, which is widely expected to keep rates steady at its March meeting. Market players will also take cues from Fed Chairman Jerome Powell's remarks during the press conference, as it might offer some hints about the future trajectory of US interest rates. On Thursday, India’s S&P Global Manufacturing and Services PMI will be due.
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