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Rupee strengthens as softer US CPI cools hawkish Fed odds
USD/INR fell toward 96.11, and CME FedWatch cut the probability of a near-term rate hike to 16.6% from 41.7% earlier.
The Indian rupee strengthened against the US dollar on Wednesday, with USD/INR edging down to around 96.11 as the US dollar faced selling pressure after softer-than-expected US CPI data for June.
FXStreet said the headline inflation rate cooled to 3.5% year-on-year from 4.2% in May, while core CPI rose 2.6% year-on-year versus 2.8% estimates, easing concerns about near-term Federal Reserve rate hikes.
According to the CME FedWatch tool cited by FXStreet, the odds of a rate increase at the policy meeting this month dropped to 16.6% from 41.7% on Monday. In congressional testimony, Fed Chairman Kevin Warsh reiterated the Fed’s focus on bringing price stability and said the Fed has no tolerance for persistently elevated inflation.
The report also noted US dollar strength was weighed by a weaker dollar index, with the US Dollar Index trading about 0.15% lower near 100.80, while USD/INR held above the 20-day EMA near 95.37 as the near-term trend stayed supportive.
Latest closeDollar index 100.94 ▼0.3%