USD/INR Price News: Indian rupee prints four-day downtrend near 75.50 on RBI status-quo

• USD/INR refreshes intraday high, pokes weekly top following RBI decision.
• RBI matches market forecasts of no change in policy rates, Governor Das sounds optimistic.
• Market sentiment remains firm amid receding fears from Omicron, hopes of more stimulus.
• Headlines from China, Russia test bulls but softer yields, Wall Street gains underpin optimism.

USD/INR rakes the bids to renew daily high around 75.46 following the Reserve Bank of India (RBI) Interest Rate Decision on early Wednesday.

The Indian central bank kept the benchmark interest rate (Repo) and Reverse Repo rate unchanged at 4.0% and 3.35% respectively, matching market consensus. It’s worth noting that some analysts on the street cited mild chances of a hike in the Reverse Repo rate ahead of the event. Additionally, the RBI also kept Marginal Standing Facility (MSF) and Bank Rate unchanged.

Following the monetary policy decision, RBI Governor Shaktikanta Das said, “Prospects of economic activity steadily improving,” per Reuters. “Stance accommodative as long as necessary to revive growth on a durable basis,” adds RBI’s Das.

Other than the RBI verdict, risk-on mood and downbeat US Treasury yields were trying the challenge the latest run-up in the USD/INR prices.

An absence of the Fed rate hike chatters, mainly due to the silent period before the next week’s Federal Open Market Committee (FOMC) and Friday’s US Consumer Price Index (CPI). On the other hand, receding fears of the South African coronavirus variant, dubbed as Omicron, join policymakers’ readiness to safeguard respective economies of China and Japan to favor risk appetite.

Alternatively, geopolitical tensions between the Washington and Kremlin, as well as the US-China tussles, join fears of Chinese real-estate companies’ default to probe the optimists and limit the USD/INR downside.

Amid these plays, the US 10-year Treasury yields drop 1.7 basis points (bps) to 1.463% at the latest while retreating from a weekly high whereas the S&P 500 Futures rise 0.40% intraday by the press time. It’s worth noting that Wall Street benchmarks rallied the previous day with the S&P 500 marking the best run-up since March.

Moving on, a lack of major data/events may challenge the USD/INR pair traders, highlighting the risk catalysts to be watched for fresh impulse. However, Thursday’s inflation data from China, followed by the US CPI, will be crucial to follow ahead of the next week’s Fed meeting.

Technical analysis

Although 75.50 guards the immediate upside of the USD/INR prices, comprising mid-October tops, bullish bias remains intact until the quote drops back below a seven-week-old horizontal area near 75.20.