- USD/INR has failed to sustain the all-time-high recorded above 79.00.
- The DXY is displaying back and forth moves ahead of Fed Powell.
- Oil prices have corrected a little, and the upside remains favored on prolonged supply constraints.
The USD/INR pair has slipped below the psychological support of 79.00 at the open, however, the upside remains imminent on broader strength in the US dollar index (DXY). The asset recorded an all-time high of 79.09 on Tuesday and a follow-up corrective move due to profit-booking has dragged the asset lower.
The DXY is trading sideways in a narrow range of 104.36-104.52 as investors are awaiting the speech from the Federal Reserve (Fed) chair Jerome Powell and US economic data. As the Fed is fully committed to bringing price stability to the US economy, Fed chair Jerome Powell may dictate a hawkish ideology on interest rate policy for July.
One thing that may disturb Fed policymakers now is the downbeat Consumer Confidence. The US Conference Board has reported the economic data at a 16-month low, which is 98.7 lower than the estimates of 100 and the former release of 103.2. Soaring oil and food prices have dented the sentiment of the US households. A lower Consumer Confidence results in lower consumption from the households, which may also reduce the confidence of the Fed in dictating extremely strict quantitative measures.
On the oil front, oil prices have witnessed some long liquidation after a firmer recovery. The black gold is holding itself above $111.00 and a minor correction will sooner turn into an impulsive move. The supply constraints will continue to stay prolonged as the OPEC cartel is unable to fill the restricted supply from Moscow.
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