USD/INR Price News: Indian rupee bears attack 74.50 on mixed clues

• USD/INR prints three-day uptrend, grinds higher of late.
• India’s daily covid infections drop to February levels, trade numbers improve.
• RBI hopes further economic recovery but Fed rate hike concerns keep pair buyers hopeful.
• US Retail Sales, Xi-Biden talks eyed for fresh impulse.

USD/INR stays firmer around 74.50 during a three-day run-up ahead of Tuesday’s European session. In doing so, the Indian rupee (INR) pair fails to cheer the risk-on mood amid mixed cautious sentiment ahead of the key US data.

Risk appetite improves as the Fed policymakers, namely Richmond Federal Reserve (Fed) Bank President Thomas Barkin and Fed Minneapolis President Neel Kashkari, reject the rate hike calls. On the same line are the initial comments between US President Joe Biden and his Chinese counterpart Xi Jinping. Furthermore, record-high India Exports and a narrowing of the trade deficit in October also hint at the USD/INR pair’s pullback.

It should be noted, however, that India’s lowest daily covid infections since February and optimism over the economic rebound, per the Reserve Bank of India (RBI) weigh on the quote. Additionally, the recent updates from the Xi-Biden talks hint that the world’s top two economies jostle over Taiwan issues and hence challenge risk-on mood.

Furthermore, cautious sentiment ahead of the key US Retail Sales also tests the market optimism and propels the USD/INR advances.

Amid these plays, US 10-year Treasury yields drop 2.2 basis points (bps) to 1.60% while the US stock futures and the Asia-Pacific stocks traded mixed at the latest. That said, the US Dollar Index (DXY) consolidates gains after refreshing the 16-month top the previous day.

Looking forward, USD/INR buyers can tighten the grips should the US Retail Sales figure reveal negative impacts of the 31-year high US inflation.

Read: US Retail Sales October Preview: Inflation Is the key, not Retail Sales

Technical analysis

Sustained trading above 100-DMA, around 74.30 by the press time, helps the USD/INR bulls to pierce a descending resistance line from mid-October. However, a daily closing beyond 74.50 becomes necessary for the pair to aim for the last month’s low of 74.70.