USD rises as inflation jumps
USD ended the week higher following the release of US inflation data. The data showed that the cost of living in the US jumped to a fresh 40 year high of 7.9%. This was up from 7.5% recorded in January. Rising fuel and food prices pushed the inflation index higher, mounting pressure on the Fed to act.
The Federal Reserve will meet this week to announce its interest rate decision.
The market sentiment weakened on Friday as the talks between Russian foreign minister Lavrov and his Ukraine counterpart Kuleba failed to make progress on achieving a ceasefire in Ukraine.
INR falls as inflation is likely to ease
INR edged lower as near tern inflation expectations eased. Indian retail inflation is expected to have cooled in February owing to lower food prices, however, this is likely to be short-lived as surging oil prices will push inflation much higher in the coming months.
Oil prices have jumped 12% in March alone and have almost doubled since December last year. This in turn will push fuel prices higher and ripple out across the economy.
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