Indian rupee likely higher, awaits Fed rate decision
Timilehin Adejumobi
1 min read
The Indian rupee is expected to open higher on Wednesday after U.S. inflation data reaffirmed views that the Federal Reserve will likely keep interest rates unchanged in June.
Non-deliverable forwards indicate the rupee will open at around 82.22-82.24 to the U.S. dollar, compared with 82.3675 in the previous session.
The consumer price index (CPI) showed an annual increase of 4% in May, slowing from 4.9% in April.
Data earlier this month offered a mixed picture of the U.S. labor market, while some Fed officials have called for a pause. Post the CPI data, the odds of a Fed rate hike in June have fallen to 8% from 25% on Tuesday.
The dollar index hovered close to an over three-week low hit on Tuesday, while the two-year U.S. yield dropped slightly in Asia after rising to its highest since March 10.
“We think it will be a hawkish pause as the Fed emphasizes that the hiking cycle might not be done. Whether the pause turns into a skip will depend on incoming data,” DBS analysts said in a note.
This report’s information was first seen on ZAWYA; to read more, click this link.
