Ella 
The Indian Rupee (INR) weakened against the US Dollar (USD) on Monday as the USD staged a recovery. Latest figures revealed that India’s Wholesale Price Index (WPI)-based inflation climbed to 3.36% year-on-year in June, up from 2.61% previously reported. Despite expectations of a 3.50% increase, the data released on Monday fell slightly short.
The INR’s decline was influenced by subdued US inflation figures. Prospects of Federal Reserve (Fed) rate cuts, coupled with lower US bond yields and consistent foreign inflows into India, offer some potential for the INR to strengthen. However, continued increases in crude oil prices and renewed demand for the Greenback from domestic banks and importers have capped the INR’s upward momentum.
The Reserve Bank of India’s (RBI) regular interventions are expected to mitigate further depreciation of the INR towards recent lows. Looking ahead, investor focus will be on the NY Empire State Manufacturing Index for July and remarks from Fed’s Mary Daly.
