Ella 
The Indian rupee weakened on Wednesday as the dollar strengthened further and U.S. bond yields rose. Strong U.S. economic data has prompted expectations that the Federal Reserve is unlikely to cut interest rates as sharply as the market expects. Investors lowered the odds of a Fed rate cut in March to 49% from 80% a week ago, the CME FedWatch tool showed.
Still, India’s positive economic outlook has provided some support to the Indian rupee. Union Petroleum Minister Hardeep Puri said India’s economy is expected to hit $5 trillion in the next fiscal year and double to $10 trillion by the end of this decade. Puri further said that the Indian economy is booming and is expected to become the fastest growing major economy and reach a $5 trillion economy by 2024-25.
Market participants are awaiting Wednesday’s U.S. S&P Global Purchasing Managers Index (PMI) report for fresh momentum. Later this week, U.S. fourth-quarter annualized GDP and December Core PCE price index (Core PCE) will be in focus. These two key US events may provide guidance on the outlook for US interest rates. Indian markets will be closed on Friday for Republic Day.
