USD/INR Price News: Indian rupee bears attack 80.00 despite sluggish USD ahead of key data

• USD/INR remains on the front foot around all-time high amid recession fears, rebound in oil prices.
• Fedspeak, yield curves test pair buyers amid downbeat China data, sluggish session.
• US Retail Sales, Michigan Consumer Sentiment Index eyed for fresh impulse.

USD/INR stays on the bull’s radar as it rises to 79.93 to refresh its intraday high during the initial hour of Friday’s Indian trading session. In doing so, the Indian rupee (INR) ignores sluggish US dollar moves amid firmer oil prices, as well as fears of recession.

That said, the US Dollar Index (DXY) steadies around 108.60 after refreshing the two-decade high of 109.28 level the previous day. That said, the greenback’s previous pullback from the multi-year top could be linked to the Fed policymakers’ attempts to talk down the expectations surrounding a 100 bps rate hike in July. Further, mixed US data and easing yields curve inversion also probed the DXY buyers the previous day.

St. Louis Federal Reserve President James Bullard and Federal Reserve Governor Christopher Waller were among the key Fed speakers who tried to talk down the odds of higher rates. That said, Fed’s Bullard said, "So far, we've framed this mostly as 50 versus 75 at this meeting." On the same line, Fed’s Waller mentioned that markets may have gotten ahead of themselves by pricing a 100 basis points rate hike in July, as reported by Reuters. It should be noted that the Fed policymakers head to a blackout period from this weekend ahead of late July Federal Open Market Committee (FOMC).

On the data front, the US Bureau of Labor Statistics mentioned that the Producer Price Index (PPI) for final demand in the US climbed to 11.3% on a yearly basis in June from 10.9% in May. This print surpassed the market expectation of 10.7%. Additionally, there were 244,000 Initial Jobless Claims in the week ending July 9 versus the previous week's print of 235,000 and market expectation of 235,000. The Weekly Jobless Claims were the highest in five months.

Elsewhere, the US 10-year Treasury yields ended Thursday around 2.95%, up 0.95% intraday, whereas the 2-year bond coupon dropped 0.75% to 3.12% at the latest. With this, the difference between the near-term and the longer-term bond coupons declined to 17 basis points (bps) versus 23 bps inversion on Tuesday. Given the easing difference between the 2-year and the 10-year US Treasury yields, the market’s fears of recession appear abating of late, which in turn allowed the US dollar bulls to take a breather. It’s worth noting that the US 10-year Treasury yields flash 2.947% level while the 2-year bond coupon seesaws around 3.118% by the press time.

It should be noted that WTI crude oil struggles to extend the previous day’s rebound from the lowest levels since February, down 0.45% around $93.45 by the press time. Furthermore, China’s Q2 Gross Domestic Product (GDP) shrank more than -1.5% expected to -2.6% QoQ, versus 1.4% prior. Further, the Industrial Production also eased but Retail Sales improved in June.

Amid these plays, S&P 500 Futures print mild gains to portray cautious optimism in the market, which in turn probe the USD/INR bulls.

Looking forward, US Retail Sales, expected 0.8% MoM in June from -0.3% marked in May, will precede preliminary readings of the Michigan Consumer Sentiment Index (CSI) for July, expected 49.9 versus 50.0 prior, to direct intraday moves of the USD/INR. Also important will be the Fedspeak and updates from the meeting of the Group of 20 key nations (G20) in Indonesia.

Technical analysis

The monthly resistance line joins overbought RSI (14) to probe USD/INR bulls around 80.15. Pullback moves, however, need validation from a one-week-old support line, close to 79.70 at the latest.