October 11, 2023
New Delhi, India
Tomorrow, the United States Consumer Price Index (MoM) is set to be released. This data holds significant importance for traders as it aligns with the U.S. Federal Reserve’s dual mandate, which aims to maintain price stability and maximum employment. Inflation has been a key concern, with a target of around 2% YoY. However, inflation remains a weak point for the central bank due to ongoing supply-chain challenges and bottlenecks, leading to multi-decade highs in the Consumer Price Index (CPI). The Fed has already taken steps to curb inflation, and it’s expected to maintain an aggressive stance.
Meanwhile, the Indian rupee had a stable trading session against the U.S. dollar in the last session, closing slightly stronger at 83.27, while the trading range was around 83.28 to 83.23, amid declining U.S. Treasury yields and concerns over rising crude oil prices due to the Middle East conflict. Traders will be keeping an eye on today’s key reports: the U.S. Producer Price Index (PPI) and the release of the FOMC minutes.
GBPINR showed upward momentum in the last session, closing at 101.98, marking a 0.59% increase. The pair’s trading range was between ₹101.57 and ₹102.19. Economic indicators, such as the BRC Retail Sales Monitor, pointed to a weaker consumption outlook for the UK economy, which contributes to over 60% of the country’s economic activity. Market attention is also on the Financial FPC meeting minutes and FOMC member speeches scheduled for today.
EURINR experienced an uptrend, closing at 88.1250 with a 0.46% gain in its last session. The trading range for EURINR was ₹87.82 to ₹88.33. Investors are closely monitoring central bank policies, with expectations that the Federal Reserve will maintain interest rates, while speculation persists about the European Central Bank potentially pausing its rate hikes. Additionally, Germany’s Harmonized Index of Consumer Prices (YoY) is scheduled for Wednesday, October 11th at 06:00 GMT, with a consensus forecast of 4.3.
Japan is set to release its Machinery Tool Orders report today. JPYINR showed upward movement, closing at 55.91, with a 0.04% increase yesterday. The trading range for JPYINR was between ₹55.89 and ₹56.09. There’s an understanding among G7 and G20 economies that currency movements should reflect economic fundamentals, which reduces the likelihood of exchange-rate intervention by Japan despite the yen’s depreciation. Tokyo is facing pressure to address sustained yen depreciation as the Bank of Japan maintains its low-interest-rate policy, amidst potential U.S. rate hikes.