- USD/INR stands on slippery ground near multi-day low, drops for fifth consecutive day.
- Risk-on mood weighs on the US dollar, downbeat options market also weigh on the quote.
- SBI report anticipates slower fall in Indian GDP, covid infections in India ease of late.
- Market sentiment favor bears, risk catalysts are the key to follow.
USD/INR takes offers around 72.65, down 0.21% intraday, amid the initial Indian trading session on Wednesday. The Indian rupee (INR) pair cheers the broad US dollar weakness, amid risk-on mood, to test the lowest levels since March 29.
Following multiple attempts from the US Federal Reserve (Fed) policymakers, market players seemed to have convinced of reflation fears as transitory and not resulting in any tapering. The same joins the US removal of China’s Xiaomi from the blacklist and readiness to ease restrictions on the Russian oil pipeline to portray the upbeat market sentiment.
Amid these plays, S&P 500 Futures print mild gains despite the Wall Street benchmark’s downplay whereas the US 10-year Treasury yields snap a four-day losing streak. However, the US dollar index (DXY) remains heavy near the early January lows by the press time.
Other than the market optimism and the USD weakness, hopes of a lesser economic loss due to the pandemic to the Indian economy, per the State Bank of India (SBI) report, shared by Accord Fintech, per Reuters, also drag the USD/INR prices to the south. “According to the report, going by the estimate of 1.3 percent GDP growth, India would still be the fifth-fastest-growing country among 25 nations that have released their GDP numbers so far. It said one likely consequence of any upward revision in FY21 estimates is a concomitant decline in FY22 GDP estimates. Its estimates now indicate that there might be nominal GDP loss of up to Rs 6 lakh crore during Q1 FY22 as compared to a loss of Rs 11 lakh crore in Q1 FY21,” said the report.
It’s worth mentioning that the latest easing of the coronavirus (COVID-19) infections in India as well as a three-day fall in the USD/INR risk reversal, suggesting a more bearish move, add to the sellers’ strength.
Looking forward, Fedspeak and the risk catalysts remain as the key near-term directives to follow for fresh impulse. However, the USD/INR prices seem to have been oversold for the short term and are near to the key support, which in turn may offer a magnified reaction in case of the US dollar rebound.
Technical analysis
Unless bouncing back beyond the 73.30 immediate hurdle, USD/INR is vulnerable to drop towards an ascending trend line from December 2019, near 72.50.
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 trims losses and approaches 1.1380
The US Dollar now succumbs to the re-emergence of the selling pressure and allows EUR/USD to recoup part of the ground lost and approach to the 1.1380 zone on Thursday. Earlier on Thursday, the ECB matched estimates and lowered its rates by 25 bps.
GBP/USD advances to daily highs past 1.3250
GBP/USD is picking up extra upside impulse and is revisiting the 1.3250 zone, or daily peaks, as the US Dollar is trimming part of its earlier advance. The move in Cable remains propped up by a firm tone in the risk complex.
Gold loses traction and revisits the $3,320 zone
Gold burst to another all‑time high, teasing the $3,360 mark per ounce before easing back to the $3,320 zone per troy ounce as the Greeback staged a comeback and Treasury yields firmed across the curve.
Crypto market cap fell more than 18% in Q1, wiping out $633.5 billion after Trump’s inauguration top
CoinGecko’s Q1 Crypto Industry Report highlights that the total crypto market capitalization fell by 18.6% in the first quarter, wiping out $633.5 billion after topping on January 18, just a couple of days ahead of US President Donald Trump’s inauguration.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.