USD/INR Price News: Indian rupee refreshes weekly low near 79.50 on broadly softer USD

• USD/INR takes offers to renew one-week low, ignores the previous day’s corrective pullback.
• Firmer sentiment in Asia underpins bullish bias for Rupee, broad risk-on mood, sluggish yields weigh on USD.
• Recovery in oil prices, hawkish Fedspeak could restrict downside moves amid a light calendar.

USD/INR takes offers to refresh the weekly low around 79.57 during the initial hour of the Indian trading session on Friday. In doing so, the Indian rupee (INR) pair cheers the broad US dollar weakness, as well as upbeat sentiment in Asia.

That said, the US Dollar Index (DXY) prints the biggest daily loss in a month while refreshing the one-week bottom around 108.75 by the press time. In doing so, the greenback gauge fails to cheer hawkish comments from Fed Chair Jerome Powell, published the previous day, while justifying the market’s firmer sentiment.

Comments from US Treasury Secretary Janet Yellen, signaling likely positive change in the US-China trade ties, seemed to have helped the market sentiment of late. Recently firmer US data and hopes that the global central bankers will be able to overcome inflation-led blow with a holistic approach and higher rates also seemed to have favored the market’s mood. On the contrary, the Wall Street Journal’s (WSJ) piece challenges the optimism a bit by suggesting further hardships for China’s technology companies.

Fed Chairman Jerome Powell said on Thursday that they need to act forthrightly and strongly on inflation, as reported by Reuters. "We think by our policy moves we will be able to put growth below trend and get labor market back into better balance," added Fed’s Powell. On the same line was Chicago Fed Chairman Charles Evans who favored a 0.75% rate hike for September. Also hawkish was the European Central Bank (ECB) which announced a 0.75% rate hike and President Christine Lagarde showed readiness for more such moves to tame inflation.

In addition to the hawkish central bank plays, firmer oil prices also challenge the USD/INR bears due to India’s heavy reliance on oil imports. That said, WTI crude oil prices rise 1.25% to $83.35 during the two-day rebound from the eight-month low.

Amid these plays, the US 10-year Treasury yields remain sidelined near 3.32%, after a positive day, whereas the S&P 500 Futures traces Wall Street’s gains around 4,010. It should be noted that India’s BSE Sensex also rises 0.50% to please bulls.

Moving on, the last lot of Fedspeak ahead of the blackout period, starting from this weekend, will be important to watch for USD/INR traders for clear directions.

Technical analysis

A clear downside break of the 50-DMA, around 79.65 by the press time, directs USD/INR bears towards the monthly low marked in the last week near 79.28.