The Indian Rupee holds near seven-month highs at 93.80, supported by record November foreign equity inflows, even as strong US labor data keeps the dollar supported ahead of this week's CPI and PPI releases.
The pair has fallen for eight straight sessions to around 93.80, near seven-month lows, driven by over $4.1 billion of foreign inflows into Indian equities in November and lower crude oil prices easing India's import bill. These flows directly reduce demand for dollars against the rupee. A hawkish Fed backdrop (78% odds of a December hike) limits further downside.
The dollar faces two offsetting forces: softening crude oil after Trump called further military action against Iran 'highly unlikely', versus hawkish Fed pricing after 165,000 October payrolls lifted December hike odds past 78%. Direction depends on this week's CPI and PPI data.
The Indian Rupee trades near seven-month lows against the dollar as foreign investors inject over $4.1 billion into Indian equities this November. While lower crude oil prices provide support, the dollar remains resilient due to a 78% market-implied probability of a December Fed rate hike following strong October payroll data.
Foreign investors have pumped over $4.1 billion into Indian equities this November, the biggest monthly net buying since September 2024, and cheaper crude oil is easing India's import costs, pushing USD/INR to around 93.80, near seven-month lows.
Possibly, since strong US jobs data (165,000 October payrolls vs 65,000 expected) has pushed the chance of a December Fed rate hike above 78%; Tuesday's CPI and Friday's PPI releases will give further direction.
Mixed: strong October payrolls of 165,000 and a 78%+ probability of a December Fed hike support the dollar, but falling oil prices after the Iran statement weigh on it, with CPI on Tuesday and PPI on Friday providing the next cues.