USD/INR Price News: Indian Rupee again recovers from 83.00 as US Dollar traces softer yields

• USD/INR reverses from one-week high, snaps two-day uptrend.
• RBI Minutes defy hopes of pause in rate hikes amid inflation woes.
• Mixed US data, BOJ’s second unscheduled bond operation weighs on US Dollar.
• US Q3 GDP, PCE details will be important for immediate directions.

USD/INR retreats from the weekly top, taking offers to refresh the intraday low near 82.77 during early Thursday, as the US Dollar reverses the previous day’s recovery amid mixed catalysts. Also adding strength to the Indian Rupee (INR) are the recently firmer Indian Treasury bond yields after the Reserve Bank of India’s (RBI) hawkish comments in the latest monetary policy meeting Minutes.

“RBI cannot afford to prematurely pause its rate tightening cycle with inflation staying above its upper tolerance band,” stated RBI Minutes on Wednesday. The Minute Statement also quotes Governor Shaktikanta Das as saying that a premature pause in monetary policy action would be a costly policy error at this juncture.

Following the hawkish comments from RBI, India’s benchmark 10-year Treasury bond yields rose to 7.29% versus 7.28% marked the previous day.

On the other hand, the US 10-year Treasury bond yields remain depressed near 3.65% after retreating from the monthly high of 3.72% the previous day. The same weighs on the US Dollar Index (DXY), down 0.36% around 103.88 by the press time.

It’s worth noting that the DXY bounced off it's weekly low the previous day as the US Conference Board’s (CB) Consumer Confidence jumped to the eight-month high of 108.3 for December, compared to the market forecasts of 101.0 and the revised prior readings of 101.40. However, the US Existing Home Sales for November, 4.09M MoM compared to 4.2M expected and 4.43M prior, probed the US Dollar bulls.

Additionally favoring the US Dollar’s safe-haven demand were updates surrounding Russia and Ukraine as Ukrainian President Volodymyr Zelensky’s US visit and Russian President Vladimir Putin’s readiness to increase the country’s military potential.

Alternatively, China’s readiness for more stimulus and the Bank of Japan’s (BOJ) second unscheduled bond buying allow US stock futures to remain mildly bid, as well as let the US Treasury bond yields retreat, at the latest.

To sum up, the year-end holiday season could challenge the USD/INR moves. However, the final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain the pair traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period.

Technical analysis

Although multiple rejections from 83.00 keeps USD/INR bears hopeful, a three-week-old bullish channel, between 83.30 and 82.65, restricts short-term moves of the pair.