USD/INR Price News: Indian Rupee stays defensive past 81.00 even as US Dollar ignores Fed's Rate hike plans

• USD/INR probes three-day downtrend but bears approach seven-week-old key support line.
• Hopes of more foreign fund inflow due to moves of Indian private players underpin INR strength.
• Mixed US data weigh US Dollar even as Fed policymakers stay hawkish heading into pre-FOMC blackout.
• Firmer Oil price, RBI’s defensive move could challenge the USD/INR bears.

USD/INR holds lower ground at the weekly low as bears keep control during early Friday in India, despite recent bounce off the intraday low to 81.25. In doing so, the Indian Rupee (INR) cheers broad US Dollar weakness, as well as hopes of INR demand, amid a sluggish session.

The chatters over heavy inflows due to Adani Enterprise's $2.5 billion share sale and the merged HDFC’s likelihood of receiving $3.0 billion Foreign Portfolio Investment (FPI) keeps the INR on the front foot. However, upbeat prices of WTI crude oil, up 0.55% intraday near $81.20 by the press time, seem to challenge the pair bears due to India’s reliance on energy imports. On the same line could be the Reserve Bank of India’s (RBI) market meddling to tame the Indian Rupee upside also limit the quote’s losses.

It should be noted that the RBI’s monthly bulletin said on Thursday that a slowdown in growth with possibilities of recession in swathes of the global economy had become the baseline assessment even as inflation might average well above target. The RBI also argued in the bulletin that emerging markets were appearing more resilient now.

Elsewhere, policymakers of the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE) favored the rate hike trajectory despite the recent softening of data. However, the US Dollar failed to cheer the hawkish comments as Treasury bond yields remain sidelined around multi-day low and the US statistics came in mixed on Thursday. That said, Federal Reserve Bank of New York President John Williams and Fed Vice Chair Lael Brainard was the latest ones to back the higher rates at the US central bank as policymakers sneak into the pre-monetary policy mum starting this Saturday.

It should be noted that the People’s Bank of China’s (PBOC) status quo and the Taiwan Defence Ministry’s signal about China’s growing air presence fail to gain major attention.

Against this backdrop, the key US Treasury bond yields remain pressured while the S&P 500 Futures print mild gains. That said, stocks in the Asia-Pacific region trade mixed at the latest.

Moving on, a light calendar pushes USD/INR traders to watch for risk catalysts and central bank comments for fresh impulse.

Technical analysis

Although the USD/INR bears keep the reins unless the quote remains below the 100-DMA level of 81.75, an upward-sloping support line from December 01, 2022, around 81.05 by the press time, puts a floor under the price.