|

USD/INR rises to near 83.50 due to the upward correction in the US Dollar

  • USD/INR gains ground as US Treasury yields recover on Thursday.
  • The US Dollar may struggle due to the growing expectations of multiple rate cuts by the Fed in 2024.
  • India's Trade Deficit increased to $19.1 billion in April due to lower exports and a rise in Gold imports.

The USD/INR pair edges higher to near 83.50 during the early European session on Thursday. The upward correction in the US Dollar (USD) helps the pair to retrace its recent losses registered in the last two days. However, the Greenback depreciated on Wednesday due to growing expectations of multiple rate cuts by the Federal Reserve (Fed) in 2024.

This dovish sentiment surrounding the Fed was bolstered after the release of the lower-than-expected monthly Consumer Price Index (CPI) and Retail Sales data from the United States (US). US CPI decelerated to 0.3% month-over-month in April and came in at a lower-than-expected 0.4% reading. While Retail Sales flattened, falling short of the expected increase of 0.4%.

The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, hovers around 104.30. The improved US Treasury yields are providing support for the Greenback. The 2-year and 10-year yields on US Treasury bonds stand at 4.73% and 4.33, respectively, by the press time.

On Wednesday, India's Trade Deficit, released by the Ministry of Commerce and Industry, increased to $19.1 billion in April, from the previous reading of $15.6 billion. This increase could be attributed to lower exports and a surge in Gold imports, according to government data.

Reuters cited a foreign exchange trader at a private bank who suggested that the Indian National Rupee (INR) "should strengthen somewhat, but don't expect the movement to be very significant as the INR would continue to underperform amidst broad USD short positions buildup." Forward premiums on the USD/INR pair saw an uptick, with the one-year implied yield rising by 2 basis points to 1.70%, supported by lower US bond yields.

USD/INR

Overview
Today last price83.4965
Today Daily Change0.0804
Today Daily Change %0.10
Today daily open83.4161
 
Trends
Daily SMA2083.437
Daily SMA5083.2954
Daily SMA10083.1691
Daily SMA20083.1721
 
Levels
Previous Daily High83.6006
Previous Daily Low83.4061
Previous Weekly High83.6168
Previous Weekly Low83.36
Previous Monthly High83.906
Previous Monthly Low82.9225
Daily Fibonacci 38.2%83.4804
Daily Fibonacci 61.8%83.5263
Daily Pivot Point S183.348
Daily Pivot Point S283.2798
Daily Pivot Point S383.1535
Daily Pivot Point R183.5424
Daily Pivot Point R283.6687
Daily Pivot Point R383.7368

Author

Akhtar Faruqui

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

More from Akhtar Faruqui
Share:

Editor's Picks

GBP/USD hits fresh three-month highs above 1.3550

GBP/USD stretches north and refreshes three-month highs above 1.3500 in the European session on Monday. The prevalent US Dollar selling bias favors bullish traders and suggests that the path of least resistance for the pair remains to the upside.

EUR/USD extends gains above 1.1600 on USD weakness

EUR/USD extends its advance above 1.1600 in European trading hours on Monday. The US Dollar resumes its downside amid weaker-than-expected US economic data, shifting Fed expectations and fading geopolitical risk premium.

Gold looks to build strength above $4,400 amid fading Fed hike bets

Gold builds on Friday's bounce from the $4,300 neighborhood and attracts some follow-through buyers at the start of a new week. The commodity is now looking to extend momentum above the $4,400 mark, though it remains below the highest level since June 5, touched last Thursday, amid mixed fundamental cues.

Pepe defends a key support amid mixed retail demand

Pepe is up nearly 2% after a 10% decline last week, showing signs of a mild recovery, while broader crypto market risk appetite remains weak. PEPE derivatives data point to a mixed outlook, as Open Interest declines while funding rates turn positive. Technically, PEPE must hold above its $0.00000255 support floor to avoid a downside of over 10%.

Why the Fed replaced the Treasury buyers who left

When Japan moved to defend the Yen, the arrangement that drew the attention was the Federal Reserve's repo facility for foreign monetary authorities, which lets an approved foreign central bank raise dollars by temporarily handing Treasuries to the Fed rather than selling them into the market. The logic was elegant. Japan gets dollars, the Treasury market avoids a forced seller, and American long rates are spared. Coverage treated it as the mechanism that made the intervention work.

Why is Crude Oil priced for a reopening the ships haven't made?
Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.