USD/INR Price News: Indian Rupee bulls take a breather around 81.90 amid risk aversion

• USD/INR rebounds from one-week low, snaps three-day losing streak.
• Anxiety surrounding US debt ceiling expiration joins consolidation ahead of top-tier US data to weigh on sentiment.
• Upbeat Oil price also prod Indian Rupee buyers ahead of India fiscal deficit statistics.

USD/INR bounces off the lowest level in a week as it picks up bids to 81.90 during early Tuesday in Europe. In doing so, the Indian Rupee (INR) pair takes clues from the market’s risk appetite and upbeat Oil price amid a sluggish session.

Markets remain downbeat as anxiety over the US debt ceiling deal escalates amid the policymakers’ inability to agree on the much-awaited decision. Recently, Bloomberg said that Kevin McCarthy and his vote-counting lieutenants are telling fellow Republicans they will not change their $1.5 trillion debt-ceiling proposal, despite rank-and-file GOP demands for alterations.

Not only the fears of US government default but the market’s preparations for the Federal Reserve’s (Fed) 0.25% rate hike, as well as the policy pivot and rate cut afterward, also seem to weigh on the sentiment.

While portraying the mood, S&P 500 Futures print mild losses near 4,155 as it snaps a two-day uptrend after mixed closing of the Wall Street benchmarks. On the other hand, the US Treasury bond yields highlight the rush for risk safety as the benchmark 10-year bond coupons drop to 3.48% at the latest. More importantly, the difference between the one-month and the three-month US Treasury bond yields widen the most since 2001 as the coupons flash 3.48% and 4.98% mark of late.

Apart from the risk-off mood, which puts a floor under the US Dollar, the upbeat prices of WTI Crude Oil also weigh on the INR due to India’s reliance on energy demand and record high deficit. That said, WTI Crude Oil prints mild gains around $78.80, up for the third consecutive day.

Looking forward, US Conference Board’s (CB) Consumer Confidence gauge for April, expected to remain steady near 104.1 versus 104.2 prior, will be important for the intraday directions. However, major attention should be given to Thursday’s US Q1 GDP and Friday’s India Federal Fiscal Deficit for March.

Technical analysis

USD/INR fades bounce off an upward-sloping support line from early November 2022, around 81.78 by the press time, as a convergence of the 100-DMA and 50-DMA challenges the Indian Rupee bears, close to 82.30 at the latest.