USD/INR Price News: Indian rupee revisits sub-74.00 zone, off monthly low ahead of Fed
|- USD/INR keeps pullback from the highest levels since August 27.
- Upbeat market sentiment, mainly due to China headlines, favors Asian currencies.
- ADB’s cautious optimism, US debt limit chatters are extra catalysts to watch.
- Fed tapering becomes the key concern for markets, geopolitics, covid headlines are important too.
USD/INR remains pressured around intraday low after stepping back from the monthly peak during early Wednesday. That said, the Indian rupee (INR) pair takes clues from the risk-on mood in Asia while paying a little heed to the firmer US Dollar Index (DXY) and the pre-Fed caution, not to forget slightly covid infections in India.
Risk appetite improves as the People’s Bank of China’s (PBOC) safeguards money flow against struggled real-estate major Evergrande with a heavy liquidity injection, of around 110 billion yuan. Also, the firm’s announcement to pay coupons on the expiry date of September 23, previously doubted, add to the risk-on mood.
Further, the International Monetary Fund’s (IMF) Chief Economist Gita Gopinath sounded optimistic over China’s ability to tame the fears emanating from the real-estate firm. On the same line were hopes of the extension to the US debt limit expiry the House votes 217-207 to favor temporary government funding and debt limit increase debate.
However, the Asian Development Bank (ADB) said, “Developing Asia's economic rebound this year could be dented by the rapid spread of the Delta coronavirus variant,” per Reuters while challenging the optimists. On the same line were headlines from Bloomberg suggesting the European Union (EU) and the US aim to pledge more enforcement to curb China's risk. Additionally, an increase in India’s virus-led daily deaths and COVID-19 infections, recently by 383 and 26,964 versus 252 and 26,115 reported yesterday, test USD/INR bears.
While portraying the mood, S&P 500 Futures snap a four-day downtrend to print 0.15% intraday gains by the press time while the US 10-year Treasury yields fade initial strength around 1.32%. However, the US Dollar Index (DXY) picks up bids to 93.258, up 0.08% intraday by the press time.
Looking forward, the Federal Open Market Committee (FOMC) monetary policy meeting announcement will be important to watch as markets do expect tapering hints but Chairman Jerome Powell isn’t famous for his bullish outlook.
Technical analysis
Although a three-week-old support line and 200-DMA challenges the USD/INR bears, respectively around 73.55 and 73.60, the pair buyers need to provide a daily closing beyond a downward sloping resistance line from late July and 50-DMA, around 74.00, to keep the reins.
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