After a soaring US Inflation Print, the rupee may be in for some rough riding ahead.
Robert Carnell (Regional Head of Research for Asia-Pacific at ING) stated that Asian FX is vulnerable to selling-off following the surprise US inflation.
The inflation data showing an increase of 9.1 percentage points from last year, which is a forty-year high, will signal that there are higher expectations for a Federal Reserve interest rate rise this month. It also strengthens recession fears.
Shane Oliver, chief economist of AMP told Reuters that the most concerning thing about the CPI numbers is the extent of increases. He said almost 90 percent of US CPI components experienced increases exceeding 3 percentage points.
“I believe that the Fed will maintain 75 as a target, although it is still too high. Anything higher than 100 will make them appear panicked. The Fed has an unconditional commitment to bring down inflation, but it will only be time.