USD/INR Price News: Indian rupee braces for RBI move near six-month low
|- USD/INR grinds higher after refreshing the multi-day top.
- Cautious sentiment ahead of RBI decision, US debt ceiling vote favor buyers.
- Improvement in Indian covid conditions, economic activities fail to impress pair sellers.
- US NFP, China’s return are extra catalysts to watch.
USD/INR keeps pullback from multi-day top around 74.77 during early Thursday.
The Indian rupee (INR) pair jumped to the highest levels since late April the previous day before easing from 75.05 as risk-on mood weighed on the US dollar. However, the market’s anxiety over the US debt ceiling standoff and the Reserve Bank of India (RBI) monetary policy meeting probe the pair sellers.
Having initially heard that the Senate Republican Leader Mitch McConnell backs a short-term extension to the US debt ceiling, the latest updates hint at voting over the key issue.
On a different page, the RBI is likely to keep the benchmark Repo and Reverse Repo rates, respectively around 3.35% and 4.0%, unchanged but may hint at future actions. “Talk of an outside chance of a reverse repo hike has grown in recent days after the RBI set higher-than-expected cut-offs at the variable rate reverse repo auctions, which traders saw as a sign of the RBI's discomfort with exiting low yield levels,” said Reuters.
Elsewhere, the likely improvement in the US-China ties and recently weaker COVID-19 numbers from India, not to forget Moody’s upward revision to the Asian nation’s credit rating, should have ideally dragged the USD/INR prices but do not amid mixed concerns.
Amid these plays, S&P 500 Futures rise 0.51% while the US 10-year Treasury yields gain 1.4 basis points to 1.538% at the latest. The US Dollar Index (DXY) steadies around 94.23 by the press time.
Given the cautious mood in the market, USD/INR may consolidate recent gains heading into the key events. Other than what’s already stated, Friday’s US jobs report for September also challenges the USD/INR traders from welcoming sellers after Wednesday’s three-month high ADP Employment Change. Alternatively, China's return after a week-long holidays, amid Evergrande drama, will also be eyed for fresh impulse.
Technical analysis
Despite ticking up beyond the 75.00 hurdle, USD/INR bulls need a daily closing past the stated threshold to challenge the yearly peak surrounding 75.65. Otherwise, overbought RSI conditions may play a role to trigger a pullback move towards 74.60-55 area comprising tops marked since late July.
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