USD/INR Dips: Fed Hints at September Interest Rate Reduction

USD/INR Dips: Fed Hints at September Interest Rate Reduction

The Indian Rupee (INR) edges higher against the US Dollar (USD) at the start of the week. The USD/INR pair drops to near 88.25 after posting a fresh all-time high slightly above 88.50 on Friday. The pair retraced quickly from its all-time high, following likely intervention of the Reserve Bank of India (RBI) to support the Indian Rupee, according to a report from Reuters.

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Renewed tariff threats target the EU

President Trump has floated the idea of an additional 20% tariff on European goods, potentially set for announcement later on Wednesday. This move revives worries of a transatlantic trade spat, with auto and pharmaceutical sectors reportedly in the crosshairs. Any retaliatory measures from the EU could undermine global growth and apply fresh downward pressure on the Euro.

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US Dollar near familiar range after PCE data

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, is currently flat near 104.30 on Friday following the release of the Federal Reserve’s (Fed) preferred inflation metric — the Personal Consumption Expenditures (PCE) Price Index. The reading showed a mild uptick, helping the Greenback hold recent levels. However, the rally appears capped as safe-haven flows favor Gold, and technical signals remain bearish.

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