- USD/INR picks up bids to pare the biggest daily loss in a month.
- Firmer Oil price, hawkish Fed bets weigh on Indian Rupee.
- US Core PCE Price Index eyed for clear directions on US inflation conditions and Fed’s next move.
USD/INR prints mild gains around 82.70 as it consolidates the biggest daily loss in a month during early Friday. In doing so, the Indian Rupee (INR) pair struggles to cheer cautious optimism in the Asia-Pacific region as Oil price extends the previous day’s rebound from the monthly low.
Markets in the Asia-Pacific region appear slightly positive, ex-China, as government nominees for the Bank of Japan (BoJ) board appear in no mood to challenge the easy money policies.
Alternatively, mixed headlines surrounding China, due to its peace plan for Ukraine and ties with Russia, join the US-China readiness for trade talks despite not sharing the details and criticizing each other on various issues to challenge the market sentiment.
Elsewhere, India is yet to recover from the Adani-led equity fiasco and the government’s push for cutting the budget deficit, which in turn raises doubts about one of the top Asian economies’ growth prospects. It’s worth noting that strong Oil prices recently weighed on the INR due to India’s reliance on energy imports.
While portraying the mood, Wall Street closed on the positive side but the S&P 500 Futures recently failed to extend the recovery moves from the monthly low by retreating to 4,015, down 0.10% intraday at the latest. Further, the US 10-year Treasury bond yields seesaw around 3.87%, making it less active on the day, whereas the US two-year bond coupons stay inactive near 4.69% by the press time.
Moving on, USD/INR traders should pay attention to the risk catalysts for clear directions ahead of the Federal Reserve’s (Fed) favorite inflation gauge, namely the Core Personal Consumption Expenditures (PCE) Price Index. That said, the latest slew of positive US data keeps buyers hopeful.
Also read: US PCE Inflation Preview: Can the US Dollar turn bullish for good?
Technical analysis
Although a four-month-old descending resistance line, around 82.95 by the press time, keeps challenging USD/INR bears, 50-day Exponential Moving Average (EMA) level surrounding 82.25 puts a floor under the price.