- USD/INR takes offers to renew one-week low, ignores the previous day’s corrective pullback.
- Firmer sentiment in Asia underpins bullish bias for Rupee, broad risk-on mood, sluggish yields weigh on USD.
- Recovery in oil prices, hawkish Fedspeak could restrict downside moves amid a light calendar.
USD/INR takes offers to refresh the weekly low around 79.57 during the initial hour of the Indian trading session on Friday. In doing so, the Indian rupee (INR) pair cheers the broad US dollar weakness, as well as upbeat sentiment in Asia.
That said, the US Dollar Index (DXY) prints the biggest daily loss in a month while refreshing the one-week bottom around 108.75 by the press time. In doing so, the greenback gauge fails to cheer hawkish comments from Fed Chair Jerome Powell, published the previous day, while justifying the market’s firmer sentiment.
Comments from US Treasury Secretary Janet Yellen, signaling likely positive change in the US-China trade ties, seemed to have helped the market sentiment of late. Recently firmer US data and hopes that the global central bankers will be able to overcome inflation-led blow with a holistic approach and higher rates also seemed to have favored the market’s mood. On the contrary, the Wall Street Journal’s (WSJ) piece challenges the optimism a bit by suggesting further hardships for China’s technology companies.
Fed Chairman Jerome Powell said on Thursday that they need to act forthrightly and strongly on inflation, as reported by Reuters. "We think by our policy moves we will be able to put growth below trend and get labor market back into better balance," added Fed’s Powell. On the same line was Chicago Fed Chairman Charles Evans who favored a 0.75% rate hike for September. Also hawkish was the European Central Bank (ECB) which announced a 0.75% rate hike and President Christine Lagarde showed readiness for more such moves to tame inflation.
In addition to the hawkish central bank plays, firmer oil prices also challenge the USD/INR bears due to India’s heavy reliance on oil imports. That said, WTI crude oil prices rise 1.25% to $83.35 during the two-day rebound from the eight-month low.
Amid these plays, the US 10-year Treasury yields remain sidelined near 3.32%, after a positive day, whereas the S&P 500 Futures traces Wall Street’s gains around 4,010. It should be noted that India’s BSE Sensex also rises 0.50% to please bulls.
Moving on, the last lot of Fedspeak ahead of the blackout period, starting from this weekend, will be important to watch for USD/INR traders for clear directions.
Technical analysis
A clear downside break of the 50-DMA, around 79.65 by the press time, directs USD/INR bears towards the monthly low marked in the last week near 79.28.
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 remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
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.