Ella 
The Indian rupee strengthened on Tuesday. Dollar selling by custodian banks on Monday boosted the Indian rupee to a nearly three-month high, followed by importer dollar demand which boosted the greenback and pressured USD/INR to close slightly lower. Nonetheless, expectations of three rate cuts from the Fed next year may limit the dollar’s upside and be bearish for USD/INR.
Overseas investors bought more than $1 billion in Indian stocks on Friday, compared with $1.5 billion in purchases in the first four days of the week, according to National Securities Depository Corporation of India data. The market is likely to be in for a quiet trading session amid subdued trading activity as traders prepare for the long holiday weekend.
On Monday, India’s Minister of State for Finance Pankaj Chaudhry said that it was impossible to cut interest rates as various factors also caused changes in the trade situation. Chaudhry added that the Indian rupee exchange rate is determined by the market and the government has not set a target, specific level or range. Earlier this month, Reserve Bank of India Governor Shaktikanta Das said the Indian rupee would be less volatile in 2023 compared to emerging market countries.
Investors will focus on U.S. housing data due on Tuesday, including building permits and housing starts. Later this week, the annual rate of U.S. third-quarter gross domestic product released on Thursday and the core PCE price index, the Fed’s preferred inflation measure, released on Friday will be in focus.
