USD/INR Price News: Indian rupee sellers poke 79.00 despite China-linked optimism

• USD/INR takes the bids to refresh intraday high, snaps two-day downtrend.
• Progress on US-China trade ties, firmer yields underpin cautious optimism in Asia.
• Anxiety ahead of the key data/events joins fears of aggressive central banks, recession to weigh on market sentiment.
• Pullback in oil prices fails to please INR bulls amid fears of economic slowdown.

USD/INR rises the most in three days as it renews an intraday high near 79.03 during the initial hour of the Indian trading session on Tuesday. In doing so, the Indian rupee (INR) pair fails to cheer a pullback in the US Dollar Index (DXY) amid cautious optimism in the markets, mainly triggered by China-linked headlines.

That said, comments from Chinese Vice Premier Liu He suggests an improvement in the US-China ties, at least for now, which in turn favors the pair buyers due to Beijing’s status as a regional leader. “The two agreed to need to strengthen communication & coordination of macroeconomic policies between China and the US,” said the macro update conveying telephonic talks between China’s Liu He and US Treasury Secretary Janet Yellen.

It’s worth noting that the fears of recession, however, direct market players towards selling the Treasury bonds and propel the yields, which should have ideally recalled the US dollar bears but did not. The reason could be linked to the market’s caution ahead of Federal Open Market Committee (FOMC) Minutes and the US Jobs report for June.

Additionally, fears of economic slowdown in Germany, due to the rallying energy prices, also challenge the market sentiment and propel USD/INR prices.

That said, the WTI crude oil prices retreat from a one-week high, towards $110.00, while snapping the two-day uptrend of late.

Against this backdrop, the US 10-year Treasury yields approach 3.0% level up 1.70% intraday by the press time, whereas the S&P 500 Futures rise 0.40% by extending the previous two-day upside near 3,850.

Moving on, US Factory Orders for May, expected 0.5% versus 0.3%, will be important for the day while major attention will be given to risk catalysts.

Technical analysis

USD/INR remains sidelined between 78.85 and 79.10. That said, the bought RSI conditions hint at the pair’s pullback moves before refreshing the record high near the 80.00 psychological magnet.