What’s going on here?
The Indian rupee is holding steady at around 83.30-83.60 INR/USD, while all eyes are on key US economic data and Federal Reserve discussions this week.
What does this mean?
The rupee is expected to open largely unchanged from its previous close of 83.3825 INR/USD, maintaining the steady range seen last week. Attention is now on the US dollar and yields, shifting away from JPMorgan’s emerging market bond index inclusion. Foreign investors bought 16.54 billion rupees ($198.4 million) in Indian bonds under the Fully Accessible Route, lower than anticipated. Currency traders predict the rupee will stay within the 83.30-83.60 INR/USD range, with the risk leaning more toward a stronger dollar. Key US data releases this week, including ISM manufacturing and services data, June non-farm payrolls, and remarks from Federal Reserve Chair Jerome Powell, will heavily influence market sentiment. There’s still hope for a rate cut in September, especially after May’s PCE price index showed a flat reading, supporting ongoing disinflation.
Why should I care?
For markets: Key US data to watch.
Investors should monitor US economic indicators closely this week. The ISM manufacturing data is out today, followed by ISM services on Wednesday, and non-farm payrolls on Friday. These data points, along with Jerome Powell’s remarks on Tuesday and the Federal Reserve meeting minutes, could influence the dollar and impact global markets, including the INR/USD rate.
The bigger picture: Eyes on disinflation and crude prices.
A flat PCE price index reading in May implies that the US disinflation process is ongoing, potentially leading to a rate cut in September. Additionally, Brent crude futures are up 0.4% at $85.4 per barrel, which can affect global inflation and economic dynamics. Ten-year US Treasury yields remain at 4.39%, reflecting investor sentiment and market conditions tied to these developments.
