USD/INR Price News: Rupee renews record low at 79.60 as India’s inflation, growth appear grim

• USD/INR prints four-day uptrend to refresh an all-time high.
• Reuters poll hints at further pain for Indian economy, RBI as inflation is likely to remain stronger for longer.
• US dollar cheers risk-off mood amid strong inflation expectations ahead of Wednesday’s CPI.
• Headlines concerning China, Europe also weigh on the market sentiment.

USD/INR takes the bids to refresh its all-time high at 79.58 during the four-day uptrend as US dollar bulls keep the reins amid fears of recession and inflation. Also contributing to the Indian rupee (INR) pair’s run-up during Tuesday’s Asian session are the downbeat market forecasts over the nation’s economic prospects.

India's inflation will hold above the top of the central bank's tolerance band for at least the rest of 2022, longer than previously thought, making several more interest rate hikes in coming months all but inevitable, a Reuters poll showed.

The survey also forecasts India GDP growth at 7.2% in the Financial Year (FY) 2023, 6.5% in FY2024 and 6.5% in FY2025 (versus 7.5%, 6.5% and 6.5% respective expectations published in April poll).

On a broader front, a record-high print of the US one-year inflation expectations, as per the NY Fed’s survey of one-year-ahead consumer inflation expectations, join chatters surrounding recession to propel the USD/INR prices. That said, the NY Fed’s inflation precursor jumped to 6.8% in June, versus 6.6% prior.

Also contributing to the market’s pessimism are the hopes of the Fed’s aggression, previously backed by the latest US jobs report. As per Friday’s release, the US Nonfarm Payrolls (NFP) rose by 372K for June, versus the expected 268K and downward revised 384K prior while the Unemployment Rate remained unchanged at 3.6%.

Further, Shanghai’s first coronavirus Omicron sub-variant BA-5 case escalated virus woes and public outrage after the dragon nation failed to sustain the unlock activities. Moreover, strong inflation data from the Asian major and doubts over Beijing’s GDP goal, as well as on the stimulus’ ability to renew optimism, also spoil the mood and keep USD/INR sellers hopeful. It should be noted that the likely gas storage for Eurozone and the anticipated economic slowdown in the old continent also fuel the Indian rupee pair.

Amid these plays, US stock futures and Asia-Pacific shares remain pressured while the US Treasury yields keep flashing recession woes by the press time.

Moving on, risk catalysts could entertain traders ahead of Wednesday’s US Consumer Price Index for June, expected 8.8% versus 8.6% prior.

Technical analysis

Although overbought RSI (14) tests USD/INR buyers, the quote is all set to poke a fortnight-old resistance line near 79.85 unless declining below an upward sloping trend line from May 05, close to 78.80 by the press time.