• The Indian Rupee drifts higher on the weaker US dollar on Tuesday. 
• India’s inflows might lift the INR, while the weakness in major Asian peers, higher oil prices might cap the upside. 
• Traders await US Chicago Fed National Activity Index, Consumer Confidence and the speech from Fed’s Cook and Bowman on Tuesday. 

The Indian Rupee (INR) gains traction on Tuesday, supported by the softer US Dollar (USD) across the board. The significant inflows related to the inclusion of Indian bonds in the JPMorgan emerging market debt index could support the INR. However, the upside of the Indian Rupee might be limited by a decline in major Asian currencies like the Chinese Yuan and the Japanese Yen. Additionally, the rise in crude oil prices amid the hope for strong summer driving demand could weigh on the INR as India is the world’s third-largest oil consumer after the United States (US) and China. 

The US Chicago Fed National Activity Index for May and Consumer Confidence will be released on Tuesday. Also, the Fed’s Lisa Cook and Michelle Bowman are set to speak. Investors will shift their attention to the key US economic data later this week. The final reading of US Gross Domestic Product (GDP) for the first quarter (Q1) is due on Thursday, and the Personal Consumption Expenditure (PCE) Price Index for May will be published on Friday.