(Reporting by Anushka Trivedi; Editing by Janane Venkatraman)
anushka.trivedi.thomsonreuters.com@reuters.net)) By Anushka Trivedi
MUMBAI, April 13 (Reuters) - The Indian rupee advanced
on Thursday after U.S. inflation cooled, while Federal Reserve
officials flagged risks to the economy, which compounded
troubles for the dollar index.
The rupee traded around 81.96 per dollar by 10:41
a.m. IST compared to 82.0775 in the previous session.
U.S. Consumer Price Index (CPI) climbed 0.1% last month
after advancing 0.4% in February. Economists polled by Reuters
had forecast the CPI gaining 0.2% in March.
However, core CPI remained elevated, which analysts warned
could be a cause for concern.
Moreover, minutes from the Fed's March meeting revealed
worries among members regarding the banking crisis, with staff
projections of a mild recession later this year.
That sent the dollar index down 0.6% overnight, while
U.S. bond yields dropped in anticipation of Fed rate cuts.
Futures showed the expectations of a 25-basis point (bps)
hike from the Fed next month were near 71%, with that likely
being the final hike before rates are cut from July onwards. "Concerns about growth, rather than inflation, are likely to
keep central bankers busy over the next 12 months," said Anindya
Banerjee, head of research - FX and interest rates at Kotak
Securities.
With inflation down and the economy stagnating, central
banks may not be able to ignore the need for lower interest
rates for much longer and the markets have started to factor
that in. Hence, the dollar may continue to be pressured, he
added.
The rupee's gains during the day may be capped due to mixed
cues and rising crude prices, said a state-run bank trader.
Brent crude futures jumped to more than $87 per
barrel overnight, near their 2023 highs. Asian currencies strengthened, while equities declined as
Hong Kong tech shares were sold off.
Markets await U.S. retail sales data on Friday to see how
consumer spending is being affected by higher prices.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.