Ella 
The US dollar (USD) edged lower as the Indian rupee pared losses on Monday. The Indian rupee’s recovery was supported by a positive outlook for the Indian economy and continued diplomatic inflows into government bonds. Foreign portfolio investors have increased their holdings of Indian government bonds by about 50% since the announcement of their inclusion in the index less than six months ago. That said, continued risk-off market conditions, rising crude oil prices, and rising US Treasury yields could halt the INR’s upside and create “tailwinds” for the USD/INR pair.
Investors will be closely watching Wednesday’s Federal Reserve interest rate decision, with the central bank widely expected to keep interest rates steady at its March meeting. Market participants will also take cues from Federal Reserve Chairman Jerome Powell’s remarks at a press conference, as this may provide some signals on the future path of U.S. policy rates. On Thursday, India will release the S&P Global Manufacturing and Services Purchasing Managers Index.
