- USD/INR struggles to keep rebound from two-week low.
- India vaccinates 1.0 billion population, US stimulus in the pipeline.
- US Treasury yields fail to underpin greenback strength despite Fed tapering chatters.
USD/INR fades bounce off a fortnight low, mildly bid around 74.87 heading into Thursday’s European session. The Indian rupee (INR) pair snaps two-day downtrend despite firmer fundamentals from India, the reason could be linked to the broad US dollar weakness.
India officially vaccinated over 1.0 billion people and takes a sigh of relief from the pandemic risk, at least for now. In addition to the strong jabbing, recent declines in the COVID-19 numbers and the virus-led data also favor the INR bulls. As per the latest data, coronavirus fatalities eased from 197 to 160 whereas the active cases dropped the most in a day since March the previous day.
On the other hand, the US Dollar Index (DXY) fails to benefit from the consolidation in the market sentiment, printing a seven-day downtrend to a fresh three-week low near 93.50 by the press time. That being said, the US 10-year Treasury yields remain firm around 1.67%, up three basis points (bps) to refresh the highest levels since May.
It should be noted that Evergrande’s ability to secure a one-month extension to the defaulted $260 million bond contrasts trade-off risk emanating from China’s property stress cited by the global rating agency Fitch to confuse traders. Tapering signals from Federal Reserve Governor Randal Quarles and Cleveland Fed President Loretta Mester have been the latest to pump the US 10-year Treasury yields.
As a result, USD/INR traders should wait for a clear direction and hence Friday’s preliminary reading of October’s activity numbers will be the key catalysts to watch.
Technical analysis
Unless crossing a seven-day-old descending resistance line near 75.15, USD/INR bears remain directed towards an upward sloping support line from early September, around 74.50 by the press time.
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
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.