The majority of Asian currencies fell in tandem with the dollar index’s increase to 102.60.The core CPI is predicted by Reuters’ panel of experts to increase by 0.3% month over month in December, when U.S. consumer inflation data is expected on Thursday. Core CPI is predicted to increase by 3.8% year over year, which is less than the 4% rate of increase seen in November.
Three dealers said that this was caused by a major UK-based bank selling dollars. They claimed it was likely that these were inflows of external commercial borrowing. According to Dilip Parmar, an HDFC Securities foreign exchange research analyst, “dollar inflows have kept the rupee the top performer among Asian currencies.”
We’ll have to wait and see if the decision is sustainable in light of how the Reserve Bank of India, or RBI, has handled similar inflows in the past.
If the report meets expectations, it would indicate that the Federal Reserve is moving closer to its goal inflation rate of 2%, which would give investors more hope that this year’s rate cuts will occur. The level of accuracy of the existing interest rate expectations will be revealed by the U.S. inflation statistics. It is quite likely, according to investors, that rate decreases will begin at the March meeting. According to the CME FedWatch Tool, markets are currently pricing in a nearly 66% likelihood that the Fed may start easing rates in March.
