USD/INR holds grounds above 82.50, focus on Indian GDP, US PCE

• USD/INR hovers around 82.60 ahead of India’s economic data release.
• India’s GDP is expected to have grown by 7.7% for the April-June quarter.
• Soft US data and declining US bond yields continue to put pressure on US Dollar (USD).

USD/INR consolidates around 82.60 during the Asian session on Thursday as market participants prepare for upcoming data releases from India and the United States (US). As said, India’s Gross Domestic Product (GDP) is set to be released later in the day. On the US docket, notably the Personal Consumption Expenditures (PCE) and Initial Jobless Claims (Aug 25) will be released during the North American session.

Investors will likely monitor these datasets to have a clearer insight into shaping the strategies before placing fresh bets on the USD/INR pair. According to a Reuters poll, India's GDP for the April-June quarter is anticipated to have grown by 7.7%. This rate of expansion is deemed the fastest annual pace in a year, attributed to robust growth in the service sector, higher demand and elevated government spending.

The USD/INR pair exhibited strength in previous sessions, yet it trimmed some of its gains due to the optimistic sentiment prevailing in the Asian regional markets. This sentiment was influenced by China's economic stimulus measures and disappointing economic data from the US. Chinese authorities have recently expressed their disapproval of complaints made by US Commerce Secretary Gina Raimondo regarding challenges faced by American companies operating in China.

US Dollar Index (DXY) is struggling to break a three-day period of losses and is currently trading around 103.10 as of the time of writing. On Wednesday, the DXY marked its two-week low below 103.00 level. The Greenback experiences losses, primarily due to downbeat US economic data and the decreasing yields on US Treasury bonds. In the previous session, the yield on a 10-year US bond dropped to a low of 4.08% and is presently trading at 4.11%.

Following the recent soft Job Openings data from the previous Tuesday, the August ADP National Employment reported a hiring figure of 177K jobs added to the economy. This contrasts with the expected 195K and the 371K jobs added in July. Preliminary Gross Domestic Product (GDP) declined to 2.1% from the previous reading of 2.4%, which was expected to remain consistent.