- USD/INR fades bounce off two-week low, drops for the second consecutive week.
- India lauds one billion vaccinations, China’s Evergrande adds to the positives.
- Inflation fears, pre-PMI caution challenge market bulls amid Fed tapering chatters.
USD/INR reverses the previous day’s corrective pullback from a fortnight low ahead of Friday’s European session. That said, the Indian rupee (INR) pair sellers attack the intraday low near 74.80, down 0.09% by the press time.
In doing so, the INR bulls cheer the one billion covid vaccinations at home, as well as the growing optimism of Finance Minister Nirmala Sitharaman, as portrayed during her early week speech. Recently, Indian Prime Minister Narendra Modi lauded the promise of jabbing the majority of the nation’s population and taming the virus risk.
Also favoring the Asian currency could be risk-positive headlines from China. In addition to the hopes of the Sino-American phase one trade deal, Evergrande’s ability to pay bond coupons and chatters that Hopson is still interested in the troubled firm’s assets, despite the latest failure to seal the deal, brighten the mood in Asia.
Elsewhere, New York Federal Reserve (Fed) President John Williams is the latest one to reiterate the inflation fears following Fed Governor Christopher Waller and Randal Quarles, as well as Cleveland Fed President Loretta Mester.
Although the inflation fears and Fed tapering woes underpin the US Treasury yields, the US Dollar Index (DXY) fails to keep the previous day’s recovery moves, down 0.03% intraday around 93.73 at the latest.
Hence, USD/INR traders seek clarity and may wait for the US PMIs, as well as a speech from Fed Chairman Jerome Powell, up for publishing later in the day, for fresh impulse.
Technical analysis
The pullback from a double-top surrounding 75.65 directs USD/INR traders towards a seven-week-old support line near 74.55.
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