Rupee Weakens Against Dollar Amid Strong US Inflation Data

The Indian Rupee (INR) weakened against the US Dollar on Thursday, reversing its earlier gains due to softer crude oil prices. The USD/INR pair rose towards 95.50 after hitting a 10-day low of 95.40 on Tuesday.

Despite lower crude prices, which typically support energy-importing currencies like the INR, renewed demand for the US Dollar dominated price action following Wednesday's US Personal Consumption Expenditure (PCE) Price Index report.

The US Bureau of Economic Analysis released fresh inflation data on Wednesday, showing core PCE inflation at 3.3% Year-on-Year and headline PCE Price Index rising to 3.7% Year-on-Year. This steady pace surprised analysts who projected a slowdown in inflation.