December 12, 2024
New Delhi, India
USDINR Today
Rupee (INR) depreciated on Thursday during the Asian trading session, following its record low in the previous session. Contributing factors include a sharp decline in the Chinese Yuan and increased demand for the US Dollar (USD) from importers and foreign banks.
The appointment of career bureaucrat Sanjay Malhotra as the next Reserve Bank of India (RBI) governor has further fueled expectations of a dovish monetary policy stance. Traders anticipate potential interest rate cuts, which could add selling pressure on the INR.
RBI Intervention Likely to Limit INR Weakness
Despite the downward pressure, the Indian Rupee’s losses might be capped as the RBI is expected to intervene by selling USD to curb excessive depreciation. Such interventions have been a common practice to maintain currency stability.
Key Data Releases to Watch
- India: CPI inflation, Industrial Output, and Manufacturing Output data are scheduled for Thursday, which could provide insights into the country’s economic trajectory.
- US: November Producer Price Index (PPI) and weekly Initial Jobless Claims data are also due later on Thursday.
Global Market Updates
On Wednesday, the US Consumer Price Index (CPI) inflation rose to 2.7% year-on-year in November, aligning with market expectations. Core CPI, which excludes volatile food and energy prices, also climbed 3.3% YoY. Monthly, both headline and core CPI rose by 0.3%.
Fed funds futures suggest a 95% likelihood of a rate cut at the Federal Reserve’s December meeting. Similarly, in India, economists at Capital Economics anticipate a 25 basis point repo rate cut at Malhotra’s first Monetary Policy Committee (MPC) meeting, possibly as early as February.
As markets digest these developments, currency traders remain focused on inflation data from both India and the US, which could influence policy decisions and the trajectory of the INR in the near term.
At the time of writing this news, USDINR was tradinga around 84.870 +0.050(+0.06%) by 10:55 AM IST today.
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