USD/INR Steady as India CPI Rises to 3.48%, Below 3.80% Forecast

India's Consumer Price Index rose to 3.48% year-over-year in April, up slightly from 3.40% in March but significantly below the market consensus of 3.80%. The softer-than-expected reading keeps inflation well within the Reserve Bank of India's 2%-6% comfort band and below its 4% medium-term target, reinforcing expectations that the RBI retains room for further monetary easing. The uptick was primarily driven by accelerating food inflation, which climbed to 4.20% as prices for essential items edged higher. Despite the food price pressures, the benign headline figure suggests core inflation remains subdued. For USD/INR traders, the below-forecast CPI print may support a dovish RBI stance at upcoming policy meetings, which could weigh on the rupee over the medium term. However, the modest nature of the inflation increase limits immediate downside for INR. Traders should monitor upcoming RBI communications and global risk sentiment, particularly US dollar dynamics, for directional cues on USD/INR in the near term.