● USD is rising as the Fed is keen to frontload the rate hikes to bring inflation lower as quickly as possible before it starts creating cracks in the US economy.
● The Federal Reserve Chair Jerome Powell signalled a 50-bps rate hike in May and possibly another in June.
● US jobless claims unexpectedly rose to 185,000, up from 180,000. However, this is still down at around five-decade lows.
● U.S. CPI rose 8.5% ahead of the 8.3% expectation year on year in March, up from 7.9% in February. The data also showed that core inflation rose to 6.5%, which was less than the 6.6% expectation.
● US PPI inflation also came in above forecasts jumping 11.2% year on year in March, up from 10% in February and well ahead of the 10.5% expectation.
● INR trades under pressure, tracing domestic equities lower as the more hawkish Federal Reserve stance hurts risk sentiment.
● The IMF projects that India’s GDP will grow at 8.2% in FY23, 0.8% lower than projected in January. The GDP is expected to rise 6.9% in FY24, lower than what was projected previously.
● Lower oil prices offering some support to the INR. West Texas Intermediate trades lower but remains over USD 100 per barrel. Oil prices are falling on demand concerns amid slowing global growth forecasts.
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