The USD/INR pair was a notch firmer on Wednesday, as market players adjusted positions ahead of key US CPI inflation report, which may provide clues over the Federal Reserve’s future interest rate trajectory.
As of 7:10 GMT on Wednesday the USD/INR pair was edging up 0.11% to trade at 82.9320.
According to Anand James, chief market strategist at Geojit Financial Services, the currency pair’s inability to move much beyond the 83 level indicates weak buying interest.
The US Dollar Index was last up 0.16% on the day to 104.716.
US core CPI inflation, a closely watched metric by the Fed, is expected to have slowed further to 4.3% in August from 4.7% in July. The latter has been the lowest annual core inflation reading since October 2021.
US annual headline inflation, however, is expected to have accelerated to 3.6% in August from 3.2% in July, mostly due to base effects from last year and a surge in oil prices amid tighter supply.
The Federal Reserve is largely expected to leave borrowing costs without change at its September policy meeting, while futures now suggest an almost 40% chance of a rate hike in November.