Updated February 13th, 2024 at 08:25 IST

Rupee awaits US inflation data amid market uncertainty

Non-deliverable forwards suggest that the Rupee's opening will remain largely unchanged from the previous session's level of 83.0025.

Reported by: Business Desk
Rupee | Image:Unsplash
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Rupee in focus: The Rupee is anticipated to open with minimal change on Tuesday, with investors eyeing the forthcoming US inflation figures to gauge the Federal Reserve's stance on interest rate adjustments.

Non-deliverable forwards suggest that the Rupee's opening will remain largely unchanged from the previous session's level of 83.0025. Rupee traded within a narrow 4 paisa range around the 83 mark, on Monday.

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Market sentiment appears indecisive, with traders uncertain about the currency's direction. The upcoming US inflation data is expected to provide clarity and potentially alleviate the prevailing uncertainty surrounding the Rupee's value.

Analysts anticipate the January inflation report to reveal a modest 0.2 per cent month-on-month (MoM) increase in consumer prices, with the core measure rising by 0.3 per cent. 

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Year-on-year (YoY), headline inflation is projected to dip to 2.9 per cent from 3.4 per cent, while core inflation is expected to decline to 3.7 per cent from 3.9 per cent.

Following the positive US monthly jobs report, investor expectations regarding Federal Reserve rate cuts have been tempered. 

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It is now deemed unlikely that the Fed will implement rate cuts at its March meeting, with anticipated cuts for 2024 reduced to 110 basis points, down from the previously forecasted 170 bps at the start of January.

Societe Generale suggests that Fed officials' confidence in reaching and maintaining the 2.0 per cent inflation goal could be influenced by the upcoming CPI update for January.

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While the dollar index registered a slight increase, Asian currencies exhibited mixed performance amidst ongoing market uncertainty.

(With Reuters Inputs)

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Published February 13th, 2024 at 08:25 IST