USD/INR Price News: Rupee bears seem tired above 75.00 despite impending power cuts in India
|- USD/INR retreats after rising to a fresh high since late April 2021.
- India’s coal-fired power plants are under immense pressure due to stock outages.
- US dollar recovers NFP-led losses amid a quiet session, mild risk-off mood.
USD/INR reverses from fresh multi-day high, declining to 75.07 heading into Monday’s European session. In doing so, the Indian rupee (INR) pair cheers the US dollar’s post-NFP weakness and the coronavirus-led economic recovery while paying a little heed to the power cut problems at home.
Having witnessed widespread power outages in China, which challenges the Asian major’s economic recovery from the pandemic, fears of a coal shortage in India, the world’s second-largest user after China, challenge the Indian economic growth prospects. “Over half of India's 135 coal-fired power plants, which in total supply around 70% of India's electricity, have fuel stocks of less than three days, data from the federal grid operator showed,” said Reuters.
On the positive side, India’s ramping covid vaccinations enabled the nation to brace for yearly festivals, suggesting further demand and firmer GDP for 2021. As per the latest Indian Ministry data, 18,132 daily cases were reported versus 18,166 marked yesterday. The official figures also point towards 193 virus-led fatalities versus 214 the prior.
Additionally, questions over the Fed tapering also probe the USD/INR bulls after Friday’s US jobs report for September disappointed US dollar bulls. That said, NFP dropped to 194K versus 500K expected but the prior reading got an upward revision to 366K. On the same line, the Unemployment Rate dropped to 4.8%, versus 5.1% expected and 5.2% prior, soothing the pains, whereas Average Hourly Earnings also jumped past 0.4% expected and revised down previous readouts of 0.4% to 0.6%.
It’s worth noting that a Columbus Day holiday in the US allows markets to consolidate the latest moves and hence USD/INR bulls seem to take a breather amid mildly negative stock futures and mixed performance of Asia-Pacific equities.
On the same line could be the market’s rethink of the Reserve Bank of India’s (RBI) latest inaction as the Indian central bank kept monetary policy unchanged despite citing covid-led economic woes and staying optimistic for future economic growth and inflation outlook.
Looking forward, USD/INR traders may witness dull trading sessions ahead of Wednesday’s US inflation data and the Federal Open Market Committee (FOMC) Minutes for the latest monetary policy meeting.
Technical analysis
A daily closing below July’s high of around 75.00 becomes necessary for the USD/INR pair’s pullback moves. Otherwise, the yearly top of 75.63 remains on the pair bull’s radar.
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