Following U.S. inflation figures, the Indian rupee is projected to open higher on Wednesday. Non-deliverable forwards suggest the rupee will open at 82.22–82.24 to the U.S. dollar, down from 82.3675.
The CPI rose 4% in May, down from 4.9% in April.
Some Fed officials have requested a pause after mixed job market data this month. After the CPI report, June Fed rate rise probabilities dropped to 8% from 25% on Tuesday.
The dollar index held a three-week low on Tuesday, while the two-year U.S. yield dipped marginally in Asia after surging to its highest since March 10.
We expect a hawkish pause as the Fed underlines that the rising cycle may not end. “Data will determine if the pause becomes a skip,” DBS analysts wrote.
On Tuesday, the S&P 500 and Nasdaq had their highest closing in 14 months, reflecting risk sentiment.
After hitting a November low on Tuesday, the offshore Chinese yuan remained under pressure versus the dollar.
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