• Indian Rupee trades in negative territory on Friday amid the stronger US Dollar.  
• The hawkish Fed projection suggested only one rate cut is likely in 2024, weighing the INR. 
• Investors await India’s May WPI Inflation data and preliminary US Michigan Consumer Sentiment report, which are due on Friday. 

Indian Rupee (INR) weakens on Friday on the extended gains of US Dollar (USD). The projections that the US Federal Reserve (Fed) will cut rates only once by 25 basis points (bps) this year instead of the two that the consensus had expected weighs on the INR. Additionally, the higher crude oil prices could further cap the upside for the local currency as India is the third largest consumer of oil behind the US and China. 

Nonetheless, the Reserve Bank of India’s (RBI) intervention will be crucial in stabilizing the INR and preventing it from significant depreciation. Investors will keep an eye on India’s Wholesale Price Index (WPI) Inflation data for May, which is expected to rise to 2.50% on a yearly basis from 1.26% in the previous reading. The hotter-than-expected consumer inflation might lift the Indian Rupee and cap the upside for the pair in the near term. On the US docket, the preliminary Michigan Consumer Sentiment report and the speech by the Fed Bank of Chicago President Austan Goolsbee will be released.