- USD/INR remains mildly bid while paring the previous weekly losses.
- Downbeat China data, risk-off mood propel prices even as WTI crude oil drops.
- Hopes of RBI’s inaction join hawkish Fed bets to keep buyers hopeful.
USD/INR picks up bids to consolidate the previous week’s losses around 82.40 during early Monday in Europe. In doing so, the Indian rupee (INR) pair portrays the market’s rush towards the US dollar ahead of the key central bank announcements.
That said, the US Dollar Index (DXY) prints a three-day uptrend around 110.80, up 0.10% intraday by the press time, as traders expect the US Federal Reserve (Fed) to announce a 75 basis point of a rate hike during Wednesday’s Federal Open Market Committee (FOMC).
On the other hand, Reuters stated that the Reserve Bank of India's monetary policy committee meeting on Thursday was most likely to discuss the central bank's response to the government after failing to meet its inflation target for three quarters in a row. “State Bank of India does not expect any other agenda for this meeting, despite being scheduled a day after the Fed meets,” the news also adds.
Elsewhere, the downbeat prints of China’s activity numbers and fears emanating from Russia also weigh on the market’s sentiment and propel the USD/INR prices. China’s official NBS Manufacturing PMI for October dropped to 49.2 versus 50.0 expected and 50.1 prior. Further, the Non-Manufacturing PMI also slumped to 48.7 compared to 51.9 market forecasts and 50.6 previous readings. “China's factory activity unexpectedly fell in October, an official survey showed on Monday, weighed by softening global demand and strict COVID-19 restrictions, which hit production,” said Reuters following the data.
Further, news of Macau’s lockdown of a casino resort and fears emanating from Russia also underpin the USD/INR upside, due to the US dollar’s safe-haven status. “Russia, which invaded Ukraine on Feb. 24, halted its role in the Black Sea deal on Saturday for an ‘indefinite term’ because it could say it could not ‘guarantee the safety of civilian ships’ traveling under the pact after an attack on its Black Sea fleet,” reported Reuters.
It should be noted that the recent weakness in the WTI crude oil prices, down 1.0% on a day around $87.40 by the press time, fails to tease the USD/INR bears. That said, the US 10-year Treasury yields seesaw near 4.00% after snapping the 10-week uptrend by the end of Friday while the US equity future prints mild losses even after Dow Jones braces for the biggest monthly jump since 1976.
Moving on, the market’s risk catalysts and second-tier PMI data from the US may entertain the USD/INR pair traders but the bulls are likely to keep the reins.
Technical analysis
A daily closing beyond the 10-DMA, around 82.50 by the press time, becomes necessary for the USD/INR bulls.
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