The rupiah appreciated early Wednesday as the dollar stabilized ahead of a key US inflation report, which would give an indication of the Federal Reserve’s monetary policy trajectory.
PTI reported that the Indian currency rose 11 paise to 79.52 against the US dollar at the start of trading.
Bloomberg showed the rupiah last changed at 79.5350 to the dollar, a gain of around 12 paise from its previous close of 79.6550 on Monday.
Indian financial markets were closed on Tuesday because of Muharram.
But the risks point to a volatile session ahead.
“There are a lot of global issues and we can’t ignore them and that’s putting strong downward pressure on global growth,” Juan Perez, head of trading at Monex USA, told Reuters, referring to the lure. of the dollar as a safe haven.
Wednesday’s U.S. consumer price index report is expected to show inflation, high for decades, eased in July after back-to-back 75 basis point hikes by the Fed in June and July.
But Friday’s data showed U.S. employers hired far more workers than expected last month, with wages still rising at a healthy pace, bolstering bets for another gigantic rate hike by the Fed at its 2019 meeting. September 20 and 21.
Money market futures show traders seeing about a two-thirds chance of a 75 basis point rise next month.
“We constantly get hotter than expected inflation reports and if it happens again the market is not prepared for it,” Edward Moya, senior market analyst at Oanda, told Reuters. “If that happens, we retest parity against the euro,” he said of the potential for the dollar to strengthen.