Markets Eye US CPI Data as Trade Deal and Inflation Impact Indian Rupee

Global markets are closely monitoring the upcoming US Consumer Price Index (CPI) report, which is expected to clarify the Federal Reserve's future interest rate trajectory. Following robust labor market data, investors are seeking confirmation from inflation figures to gauge the likelihood of further monetary policy adjustments. Meanwhile, the Indian Rupee is reacting to a significant trade breakthrough after President Trump announced a reduction in tariffs from 25% to 18%. Domestic economic data showed that India's inflation climbed to 2.75% in January, surpassing the market consensus of 2.5%. Despite rising price pressures, the Reserve Bank of India (RBI) opted to keep interest rates unchanged during its most recent policy meeting. These developments are creating a pivotal moment for the USD/INR pair, as the new trade agreement and inflation dynamics counter the currency's broader bearish trend.