US Inflation Data Reinforces Delayed Fed Rate Cuts, Strengthens Dollar
US December inflation data aligned with expectations, delaying Federal Reserve rate cuts until June 2026. The stronger dollar is pressuring the Indian rupee, which is nearing critical support levels.
Insights:
The release of US December inflation data on January 14, 2026, has reinforced market expectations for delayed Federal Reserve rate cuts, now anticipated in June 2026. The data showed headline inflation aligning with expectations, though core inflation was slightly softer than anticipated. This outcome has bolstered the US Dollar Index , pushing it to near one-month highs and exerting downward pressure on the Indian Rupee .
The Indian rupee settled at 90.19 against the US dollar on January 13, with expectations to open in the 90.26-90.30 range on January 14. The Reserve Bank of India has been actively intervening to defend the rupee at the critical 90.28-90.30 support level. Despite these efforts, the currency faces potential weakness towards the 90.50-90.60 range.
