MUMBAI: The Indian rupee was nearly unchanged on Wednesday tracking rangebound moves in its Asian peers, after Federal Reserve Chair Jerome Powell acknowledged progress on inflation but steered clear of signalling a timeline for rate cuts.
The rupee was at 83.4825 against the US dollar as of 10:00 a.m. IST, barely changed from its previous close at 83.4850.
The currency moved in a range of under 2 paisa in early trading.
The dollar index and US bond yields rose slightly on Tuesday in light of Powell’s remarks. Asian currencies were mostly rangebound.
“We are well aware that we now face two-sided risks,” and can no longer focus solely on inflation, Powell said.
However, he said he did not want “to be sending any signals about the timing of any future actions” on interest rates, emphasising the Fed’s focus on incoming economic data.
“More good data would strengthen our confidence that inflation is moving sustainably toward 2%.” Odds of a September rate cut nudged lower to about 73% from about 76% a day earlier, according to CME’s FedWatch tool.
Meanwhile, traders expect the rupee to hover in its prevailing 83.40-83.55 range in the near-term ahead of the US consumer inflation data on Thursday.
Month-on-month core US CPI is forecast to have held steady at 0.2% in June, according to economists polled by Reuters.
“If we get good (US) CPI inflation readings tomorrow, (the dollar index) should try to push below its 100-day moving average at 104.80,” DBS Bank said in a note.
India will report inflation data on Friday, with consumer inflation expected to snap a five month downtrend and rise to 4.8% year-on-year largely because of a jump in vegetable prices, according to a Reuters poll of economists.
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