USD/INR Price News: Indian Rupee rebounds to 82.00 amid cautious optimism, focus on inflation, central bankers

• USD/INR takes offers to reverse the previous day’s corrective bounce.
• Hopes of more investment in India, cautious optimism in Asia underpin India Rupee recovery.
• Oil’s struggle, US Dollar’s retreat add strength to the USD/INR pullback.
• US Inflation clues, central bankers’ speeches at ECB Forum eyed for clear directions.

USD/INR renews its intraday low near 81.95 as it cheers the broadly softer US Dollar amid cautious optimism in the Asia-Pacific zone during early Monday. In doing so, the Indian Rupee (INR) pair also benefits from the downbeat Oil price, as well as hopes of more investment into India.

Following Prime Minister Narendra Modi’s US visit, speculations rallied that a slew of tech giants including Amazon, Twitter and Facebook, will follow in the footsteps of Apple to increase their investment in India. The same optimism gains momentum investors push back plans to jump in Beijing after recently softer China data.

Elsewhere, WTI crude oil takes offers to refresh intraday low near $69.50 amid fears of China’s economic growth, despite risk-positive headlines suggesting more stimulus from Beijing. That said, global rating agency S&P recently cut China’s Gross Domestic Product (GDP) growth forecasts for 2023 to 5.2% from 5.5% previous estimations. In doing so, the black gold ignores hopes of more Oil demand and supply crunch, backed by OPEC and Russia catalysts.

Considering India’s heavy imports of Oil, as well as its rivalry with China, the USD/INR becomes vulnerable to headlines about energy prices and Beijing.

On a different page, geopolitical concerns about Beijing and Russia join hawkish Fed chatters to put a floor under the US Dollar.

It should be noted that the mostly US PMIs keep the Fed hawks on the table even as some at the S&P criticize rate hikes. That said, US S&P Global PMIs for June came in mixed as the Manufacturing PMI dropped to 46.3 from 48.4 prior, versus 48.5 expected, whereas the Services PMI improved to 54.1 from 54.0 expected despite being lesser than the 54.9 previous monthly figure. With this, the Composite PMI declined to 53.0 versus 54.4 market forecasts and 54.3 prior. Following the mixed US PMIs, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said, “Any further rate hikes will of course have a further dampening effect on this sector (services) which is especially susceptible to changes in borrowing costs." That said, Federal Reserve Bank of San Francisco President Mary Daly told Reuters on Friday that two more interest rate increases this year would be a "very reasonable projection."

While portraying the mood, the S&P500 Futures rebound from the lowest levels in a week toward regaining the 4,400 round figure, up 0.20% intraday near 4,398 at the latest. That said, the US 10-year Treasury bond yields remain sidelined near 3.73%, after snapping a two-week downtrend, whereas the two-year counterpart braces for the fourth consecutive weekly winning streak near 4.74% by the press time.

Moving on, a light calendar in India emphasizes the US inflation data and the speeches of the top-tier central bankers at the European Central Bank (ECB) Forum as the key catalysts.

Technical analysis

Despite the latest hesitance to break an upward-sloping support line from mid-April, close to 81.90 by the press time, the USD/INR pair remains on the bear’s radar unless crossing the 200-DMA hurdle surrounding 82.15.