- USD/INR consolidates Tuesday’s losses, picks up bids of late.
- Firmer oil prices, pick-up in covid cases and inflation fears favor pair buyers.
- US Durable Goods Orders may entertain traders ahead of the key Q3 GDP, BOC, ECB in focus too.
USD/INR stays mildly bid around 75.00 amid the early Indian trading session on Wednesday. The Indian rupee (INR) bears sneaks on inflation fears at home, coupled with the fresh increase in the COVID-19 fears. However, cautious mood ahead of the key US data and global central bank movers keep the pair buyers in check.
Although the Asian nation lauds over 1.0 billion vaccinations and hopes of higher tax revenues due to firmer economic transition, the latest jump in the covid cases challenges the INR bulls. That said, the daily rise in COVID-19 infections grew past 12,428 prior to 13,451, per the latest government data on Wednesday.
Additionally, growing fears that the energy crisis and a multi-year high of crude prices will escalate price pressure into the developing economy also weigh on the INR.
In this regard, the Reserve Bank of India (RBI) remains cautiously optimistic and keeps the currently easy monetary policy citing virus-led economic woes.
On the other hand, the US Dollar Index (DXY) snaps a two-day rebound from the monthly low as market sentiment dwindles ahead of the US Durable Goods Orders for September, expected -1.1% versus +1.8% prior. Even so, US stimulus optimism and receding COVID-19 fears in the US weigh on the greenback of late.
Also important will be the monetary policy meeting of the Bank of Canada (BOC) and the European Central Bank (ECB) ahead of the key US Q3 GDP, up for publishing on Thursday.
Amid these plays, US 10-year Treasury yields snap a three-day downtrend and the stock futures struggle for clear direction, suggesting further advances for the DXY should the scheduled data print a positive outcome.
Technical analysis
Sustained trading beyond a two-week-old resistance line, now support around 74.85, keeps USD/INR buyers hopeful.