Anna 
The Indian Rupee (INR) experienced downward pressure on Thursday, influenced by the strengthened US Dollar (USD) and higher US Treasury bond yields. Additionally, softer-than-expected Indian inflation data for February contributed to the INR’s decline. India’s Wholesale Price Index-based inflation dropped to a four-month low, registering a year-on-year (YoY) figure of 0.20% in February, down from 0.27% in January and below market expectations of 0.25%.
The downside movement of the USD/INR pair is expected to be limited in the short term due to foreign outflows, exacerbated by the hotter-than-expected US Consumer Price Index (CPI) report for February. The data suggests that the Federal Reserve (Fed) may postpone interest rate cuts, further bolstering the USD against the INR. Additionally, the resurgence in oil prices poses a challenge for the INR, given India’s position as the world’s third-largest consumer of oil.
Market participants are eagerly awaiting the release of US Retail Sales data later on Thursday, alongside other key economic indicators such as the Producer Price Index (PPI), Business Inventories, and weekly Initial Jobless Claims. These data releases are likely to provide further direction to the USD/INR exchange rate.
