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USD/INR Edging Higher Ahead Of Key CPI Data

INR

USD/INR is tracking back towards recent highs, just under 79.70 presently. We haven't spent too much time above this level in August, while in July there was clearly resistance around the 80.00. So, we can expect this could be a focus point for the authorities today.

  • The relief for INR from this week's lower than expected US CPI has proved to be fleeting. The edge higher in US real yields is unlikely to be helping, although a bigger headwind likely rests with firmer energy prices. The Bloomberg energy sub-index is up close to 7% so far this week and back near late July highs.
  • These developments come ahead of important data coming up later today, most notably July CPI figures. The market expects inflation to ease back to 6.75% from 7.01% in June. IP figures are also out later today as well, the market expects growth to ease to 10.3% from 19.6% last month.
  • Focus will clearly rest on the inflation though, given how important it is to the RBI outlook in H2.
  • Onshore bonds are edging higher in early trade today, the 10yr back close to 7.30%, around mid-range levels for the week. Onshore equities are slightly positive.
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USD/INR is tracking back towards recent highs, just under 79.70 presently. We haven't spent too much time above this level in August, while in July there was clearly resistance around the 80.00. So, we can expect this could be a focus point for the authorities today.

  • The relief for INR from this week's lower than expected US CPI has proved to be fleeting. The edge higher in US real yields is unlikely to be helping, although a bigger headwind likely rests with firmer energy prices. The Bloomberg energy sub-index is up close to 7% so far this week and back near late July highs.
  • These developments come ahead of important data coming up later today, most notably July CPI figures. The market expects inflation to ease back to 6.75% from 7.01% in June. IP figures are also out later today as well, the market expects growth to ease to 10.3% from 19.6% last month.
  • Focus will clearly rest on the inflation though, given how important it is to the RBI outlook in H2.
  • Onshore bonds are edging higher in early trade today, the 10yr back close to 7.30%, around mid-range levels for the week. Onshore equities are slightly positive.