- USD/INR holds lower ground, snaps three-day winning streak.
- India registers lowest virus-led death toll since April 18.
- Options market favor bears as risk reversal jumps to three-month top.
- Receding inflation expectations pull DXY back to facilitate the consolidation.
USD/INR extends pullback from late April’s top as sellers attack 74.00, down 0.21% around 74.09 amid the initial Indian trading session on Friday.
While the US dollar’s consolidation of the Fed-led solid gains triggered the pair’s initial profit booking, the latest fall could be linked to the recovering coronavirus (COVID-19) conditions in India.
As per the latest Health Ministry reports, per Reuters, India reports a 1,587 daily rise in coronavirus fatalities, the lowest since April 18, taking a total to 383,490. The news also mentions, “62,480 daily rises in coronavirus infections, taking total to 29.76 million.”
Additionally, receding US inflation expectations, per the latest 10-year breakeven inflation rate data from the St. Louis Federal Reserve (FRED), joins the optimism over US President Joe Biden’s infrastructure spending plan to weigh on the US dollar index (DXY) and favor USD/INR prices. It should be noted that an absence of any major data/events also allows the markets to book the Fed-led profits.
Even so, the options market remains bullish over the USD/INR prices as risk reversal, a gauge of bullish bets (call options) to the bearish one (put options) jump to the highest in three months with +0.250 levels.
Looking forward, USD/INR traders should keep their eyes on the DXY moves and inflation expectations for fresh impulse.
Technical Analysis
Failures to cross a seven-month-old horizontal resistance direct USD/INR towards the previous key hurdle, 50-day SMA level near 73.70. During the fall, the 74.00 can test the bears. Meanwhile, April 19-20 lows near 74.55 add to the upside filters.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD mired near 1.0730 after choppy Thursday market session
EUR/USD whipsawed somewhat on Thursday, and the pair is heading into Friday's early session near 1.0730 after a back-and-forth session and complicated US data that vexed rate cut hopes.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: Slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.