• Indian Rupee trades on a negative note on Friday amid a stronger US Dollar. 
• India's Wholesale Price Index-based inflation dropped to a four-month low, weaker than expected. 
• Investors will focus on the Indian Trade Balance data and US preliminary Michigan Consumer Sentiment, due on Friday. 

Indian Rupee (INR) loses momentum on Friday. The uptick in the pair is bolstered by the upbeat US February Producer Price Index (PPI) data. Furthermore, the weaker-than-expected Indian WPI inflation exerts some selling pressure on the INR and creates a tailwind for the USD/INR pair. India’s wholesale inflation for February cooled to a four-month low, according to the statistics ministry on Thursday. This report could form the basis for the Indian central bank’s monetary policy actions.

Nonetheless, the markets expect the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) to hold the interest rate steady in the next meeting and might cut the repo rate in the second half of the calendar year 2024. The RBI is unlikely to precede the Fed in this rate cut cycle. This, in turn, might lift the Indian Rupee and cap the upside of the pair. Moving on, investors will keep an eye on the Indian Trade Balance data, due on Friday. Also, the US Industrial Production and the preliminary Michigan Consumer Sentiment will be released later in the day.