INR off two week high amid continued strength in US dollar

The Indian rupee saw a muted action today, giving up its recent strength as US dollar saw a sharp spurt above 105 mark. Indian Rupee currently quotes at 83.37, down 6 paise on the day and has come off its two week high. Dollar index continued its ascent following a spike in consumer price inflation on Wednesday. The US consumer price index (CPI) rose 0.4% sequentially, according to data released by the Labor Department's Bureau of Labor Statistics. In the 12 months through March, the CPI increased 3.5% year-on-year, marking the biggest gain in six months. This was also more than the 3.2% reading in February. Meanwhile, the latest Fed meeting minutes noted some Fed members noted that the increases in inflation had been relatively broad based and therefore should not be discounted as merely statistical aberrations. This pushed the US dollar index near a five month high of 105.20 and it currently lingers around the same mark. The gains in INR have also been capped by a sustained firm undertone in the crude oil prices.

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