- USD/INR dribbles near the lowest levels in one month.
- China reopening joins PBOC headlines to underpin risk-on mood in Asia.
- Downbeat US wage growth weigh on Treasury yields and hawkish Fed bets.
- Japan holiday, light calendar and upbeat oil prices allow bears to lick their wounds.
USD/INR bears lick their wounds near 82.30, after refreshing a one-month low, as the Indian Rupee (INR) buyers await fresh clues during early Monday. In doing so, the quote remains indecisive after printing a three-day downtrend at the latest.
That said, China-inspired risk-on mood joins the broadly softer US Dollar to weigh on the USD/INR prices. However, a light calendar and the cautious mood ahead of this week’s key US inflation data, as well as the holiday in Japan, restrict the pair’s immediate moves.
It’s worth noting that China’s reopening of the international borders after a three-year blockage bolstered optimism in Asia. Also favoring the risk appetite could be early signals suggesting Beijing’s heavy shopping amid the year-end festive season. Furthermore, comments from the People’s Bank of China (PBOC) Official also hinted at robust growth expectations from the dragon nation and underpinned the firmer sentiment.
On the other hand, Friday’s downbeat prints of US Average Hourly Earnings, ISM Services PMI and Factory Orders pushed back the hawkish hopes from the Fed as the figures raised the US recession concerns, which in turn weighed on the US Dollar Index (DXY). Additionally, weighing on the DXY could be the mixed comments from the Fed policymakers and hopes of an upbeat US earnings season also seem to favor the USD/INR bears.
Alternatively, a light calendar and upbeat prices of Crude Oil put a floor under the USD/INR prices. The reason could be linked to India’s reliance on energy imports.
Amid these plays, S&P 500 Futures print mild gains while India’s benchmark equity index BSE Sensex rises over 1.0% by the press time.
Moving on, a lack of major data/events and firmer oil prices can restrict the USD/INR pair’s immediate moves ahead of Thursday’s US Consumer Price Index (CPI) data.
Technical analysis
A clear downside break of the 82.40 horizontal support favors USD/INR bears targeting the early December 2022 swing low near 82.10.
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Stephania Howe