- USD/INR remains heavy around intraday low, reverses previous day’s gains.
- Indian Foreign Minister eyes strong economic recovery even as gross GST revenues disappoint optimists.
- Covid woes, mixed US data weigh on sentiment ahead of FOMC minutes.
USD/INR struggles to overcome the intraday low of 74.62, down 0.14 near 74.65 amid early Wednesday. The Indian rupee (INR) pair jumped the most since mid-June the previous day as broad risk-off mood joined downbeat Goods & Services Tax (GST) data from India.
“India’s gross goods and services tax revenue in June declined for a second straight month to fall below the one-trillion-rupee level for the first time in nine months,” Reuters quotes NewsRise. The details suggest that the Gross GST collection in June stood at 928.49 billion rupees ($12.45 billion), down from 1.03 trillion rupees collected in the previous month.
Even so, Indian Foreign Minister Subrahmanyam Jaishankar said, per Reuters, “India coming out of the second wave of COVID-19, will witness strong economic recovery.”
It’s worth noting that there have been mixed play of the coronavirus (COVID-19) conditions in India amid alleged inaccurate data and slow vaccination amid claims of overcoming the second wave of the covid. Some of the national scientists have also warned over the possibilities of the third wave erupting in September-October.
On a broader front, downbeat US ISM Services PMI and the outbreak of various variants, which do resist vaccines, also heavy the mood, which in turn put a safe-haven bid under the US dollar. However, the lowest 10-year US Treasury yields since late February probes the greenback buyers amid the pre-FOMC minutes caution by the press time.
While the FOMC minutes will be watched for gauging the divide among policymakers, covid headlines will be more important for USD/INR traders.
Technical analysis
With a daily close beyond the mid-April lows surrounding 74.50-55, USD/INR bulls are capable to aim for the yearly top surrounding 75.65. Though, the 75.00 threshold and 75.25-30 may offer intermediate halts during the fall. On the contrary, bears need to remain cautious until the quote stays beyond 74.00.
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