USD/INR likely to consolidate between 65-66 range in near-term, says Commerzbank

The USDINR currency pair is expected to consolidate between a range of 65-66 over the near-term, according to reports from Commerzbank. There was some good news for the Modi government after the latest inflation figures showed signs of moderation and industrial production surprised on the upside.

September headline inflation rose 3.3 percent y/y (consensus: 3.5 percent) and at the same pace as August. Headline inflation in the first six months of the current fiscal year (April-September) stood thus at 2.6 percent and just below RBI’s projection of 2.8 percent. RBI is forecasting a firmer reading to 4 percent in the 2nd half of the fiscal year.  

"As such, a continued pick up in coming months should not be a major surprise but merely in line with RBI expectations. The GST impact on inflation will remain one factor to watch. Against this background, we still expect RBI to leave rates on hold for the foreseeable future," the report said.

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