- USD/INR holds lower ground near intraday bottom amid mildly positive markets.
- Easing in China covid numbers, property market optimism weigh on the US Dollar.
- S&P cuts India’s economic growth forecast but Morgan Stanley stays bullish.
- Firmer oil prices, hawkish Fedspeak poke pair sellers ahead of India Q3 GDP, Fed Chairman Jerome Powell’s speech.
USD/INR remains depressed around the intraday low of 81.48, picking up bids to 81.60 by the press time, as market sentiment improves during early Tuesday. Even so, mixed headlines surrounding New Delhi and firmer oil prices challenge the pair sellers of late.
Having witnessed a downbeat start to the key week, an easing in China’s daily covid infections from an all-time high of 40,347, to 38,645, seemed to have triggered cautious optimism. On the same line could a rally in the Chinese reality stocks as the national securities regulator lifted a ban on equity refinancing for listed property firms, per Reuters. “The China Securities Regulatory Commission (CSRC) said late on Monday it would broaden equity financing channels, including private share placements for China and Hong Kong-listed Chinese developers, lifting a ban that has been in place for years,” mentioned the news.
On the other hand, the global rating agency S&P cuts India’s economic growth forecast to 7.0% for the current Fiscal Year (FY), from 7.3% forecasted in September. S&P also stated that the domestic demand-led economy will be less impacted by the global slowdown.
Alternatively, analysts at Morgan Stanley expect India's Sensex stock index may hit 80,000 by the end of next year if the country is included in global bond indexes and prices of commodities such as oil and fertilizers drop sharply. “The brokerage also sees a 50% chance of the Sensex hitting 68,500 by the end of next year, assuming that the effects of the Ukraine-Russia conflict do not spill over into 2023, domestic growth continues its strong path and the United States does not slip into a protracted recession,” mentioned Reuters.
It’s worth noting that the Fed policymakers’ defense of the aggressive measures and firmer WTI crude oil, up 1.80% intraday near $78.25 by the press time, also seemed to challenge the USD/INR bears of late.
Looking forward, the US Confederation Board’s (CB) Consumer Confidence for November could entertain USD/INR traders ahead of the key Wednesday when the third quarter (Q3) Indian Gross Domestic Product (GDP) and Fed Chair Jerome Powell’s speech will be crucial to watch.
Technical analysis
Sustained trading below the 50-DMA, around 81.90 by the press time, keeps the USD/INR bears hopeful.
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