USD/INR Price News: Shifts into an unchartered territory above 83.00 amid upbeat yields

• USD/INR has shifted into unchartered territory above 83.00 as DXY soars above 113.00.
• Fed’s Beige Book has cited risks of soaring inflation and weakening domestic demand.
• RBI’s intervention has failed to hold the USD/INR rally.

The USD/INR pair is holding itself above the critical hurdle of 83.00 in the opening session citing US yields as responsible for the sheer depreciation in the Indian rupee against the mighty greenback. On Wednesday, the asset made a historic move after smashing the 83.00 hurdle for the first time. Investors dumped the Indian currency amid a flight of safety to the US dollar index (DXY).

The market participants ditched risk-perceived currencies as the risk-off impulse shot after getting weaker cues on US economic prospects from Federal Reserve (Fed)’s Beige Book. Discretionary spending has been hit hard amid soaring interest rates, mounting inflationary pressures, and supply chain disruptions. Also, sales of automobiles have trimmed as investors have postponed demand for durables to avoid higher interest obligations.

In addition to that, inflation has remained elevated due to rising input prices. Headline inflation has been impacted due to declining gasoline prices. While labor demand has been moderated as firms have terminated recruitment services due to weaker demand ahead.

Cited risk of escalating inflation in the US economy has sent yields on fire. The 10-year US Treasury yields have refreshed a 14-year high at 4.15% amid accelerating odds for hawkish Fed bets.

Meanwhile, intervention attempts from the Reserve Bank of India (RBI) have failed to block the DXY. The USD/INR pair has shifted into unchartered territory.

On the oil front, oil prices have climbed above the crucial resistance of $85.00 vigorously. Investors have shrugged off the headwinds of additional oil release from the US Strategic Petroleum Reserve (SPR) for oil prices. It is worth noting that India is a leading importer of oil and costly oil widens its fiscal deficit.