USD/INR Continues to Decline as RBI Intervenes; Investors Await US CPI Data.

Indian Rupee Strengthens on RBI Intervention, but Upside Remains Limited Amid Economic Concerns

The Indian Rupee (INR) continued its upward momentum on Wednesday, supported by strong intervention from the Reserve Bank of India (RBI). Additionally, increased US Dollar (USD) selling by exporters and profit-booking by speculators provided further support to the local currency.

However, the INR’s gains may be capped due to persistent concerns over India’s sluggish economic growth, a widening trade deficit, rising crude oil prices, and potential US trade tariffs. These factors could limit the Rupee’s ability to sustain its strength in the long run.

Investors are now awaiting key economic data releases, including India’s Consumer Price Index (CPI) for January, Industrial Output, and Manufacturing Output. On the global front, all eyes are on the US CPI inflation data, which could influence Federal Reserve policy. Additionally, market participants will closely watch speeches from Federal Reserve officials Raphael Bostic and Christopher Waller for further cues on interest rate expectations.

Stay tuned for more updates on currency movements and market trends.