Forex
Home›Forex›Major Pairs›Rupee rises as softer US CPI cools Fed hike odds
Rupee rises as softer US CPI cools Fed hike odds
USD/INR slid toward 96.11 after June CPI came in below expectations, pushing CME FedWatch odds for a near-term hike down to 16.6% from 41.7% on Monday.
The Indian rupee strengthened against the US dollar on Wednesday, with the USD/INR pair falling to around 96.11 as the greenback faced selling pressure. FXStreet attributed the move to traders recalibrating Federal Reserve interest rate expectations after the US released June CPI data that was softer than expected.
The June report showed headline inflation cooling to 3.5% year on year from 4.2% in May, while core CPI rose 2.6% year on year versus 2.8% estimates and the prior 2.9% reading. FXStreet said the deceleration helped ease concerns about Fed rate hikes in the near term, with CME FedWatch indicating the odds of a hike this month fell to 16.6% from 41.7% on Monday.
FXStreet also noted comments from Fed Chairman Kevin Warsh in testimony before Congress, where he reiterated the need to restore price stability, saying the Fed has no tolerance for persistently elevated inflation. The article further flagged that the US dollar index was about 0.15% lower near 100.80 at the time of writing.
Separately, FXStreet said foreign institutional investors turned net sellers in the Indian stock market for a second straight session on Tuesday, selling stake holdings worth Rs. 739.69 crore and additional shares worth Rs. 3,062.27 crore. The story added that USD/INR was holding above its 20-day exponential moving average near 95.37, supporting a bullish short-term bias.
Latest closeDollar index 100.94 ▼0.3%