It should be noted that the early-week releases of upbeat India inflation numbers contrast with the Reserve Bank of India’s (RBI) inaction to challenge the USD/INR pair’s latest retreat.
WTI crude oil drops half a percent to $80.25 by the press time as energy bears prod the one-week low marked the previous day amid fears of receding demand from China, one of the world’s biggest oil customers.
- USD/INR struggles for clear directions after refreshing all-time high, mildly offered of late.
- US Dollar bulls brace for FOMC Minutes, allowing Indian Rupee sellers to take a breather.
- Downbeat Oil price, pullback in yields also allow USD/INR to consolidate recent moves.
- Fed officials need to defend hawkish bias to help Greenback buyers overcome short-term key resistance.
USD/INR prints mild losses around 83.30-25 as the Indian Rupee (INR) licks its wounds around the record low on early Wednesday. In doing so, the Asian currency justifies the market’s consolidation ahead of the Fed Minutes while also cheering downbeat WTI crude oil prices, India’s major import burden.
Even so, upbeat US data and the hawkish Fed talks also weigh on the Euro prices. That said, the US Retail Sales grew 0.7% MoM in July versus 0.4% expected and 0.3% reported in June (revised from 0.2%). The details suggested that the Core Retail Sales, namely the Retail Sales ex Autos, grew 1.0% versus 0.4% market forecasts whereas the Retail Sales Control Group doubled from 0.5% previous readouts (revised from 0.6%) to 1.0% for the said month. Further, the US NY Empire State Manufacturing Index slumped to -19.0 from 1.1 prior and -1.0 market forecasts while the US Export Price Index and Import Price Index improved on MoM in July but edged lower on a yearly basis for the said month. Late Wednesday, Minneapolis Federal Reserve President Neel Kashkari ruled out talks of policy pivot by citing hot inflation and the uncertainty about the Fed’s progress in taming the same. The policymaker also said that he is not ready to say that the Fed is done raising rates, per Reuters.
Although the overbought RSI (14) line challenges USD/INR bulls, the pair’s downside remains elusive unless breaking the ascending resistance line from November 2022, now immediate support near the 83.00 round figure.