USD/INR Price News: Indian Rupee struggles to cheer IMF remarks near 81.80 amid cautious markets

• USD/INR remains pressured around intraday low, marks inactive daily performance.
• IMF says India, China to lead Asia-Pacific growth in its latest report.
• Fears of US default, return of full markets weigh on US Dollar and favor Indian Rupee buyers.
• US Factory Orders can entertain intraday traders ahead of Fed, NFP.

USD/INR treads water around 81.75, recently depressed, as market players seek more clues to cheer the International Monetary Fund’s (IMF) upbeat economic analysis for India and China during early Tuesday. In doing so, the Indian Rupee (INR) pair also pays little heed to the US Dollar’s retreat amid looming fears of default and the market’s anxiety as traders return from a long weekend.

“Asia and Pacific will be the most dynamic of the world's major regions in 2023, predominantly driven by the buoyant outlook for China and India,” said the IMF in its latest report.

Also read: IMF raises Asia's economic forecast on China recovery, warns of risks

On the other hand, talks surrounding the US default seem to challenge the market’s previously US Dollar positive bias. That said, US Treasury Department renewed fears of US default by pulling forward the date of running out of funds to match obligations if the current debt ceiling isn’t altered, to June 01 from previously signaled July. Following that, Reuters came out with the news suggesting the US Senate Majority Leader Chuck Schumer’s push for an expedited process to consider a clean two-year suspension of the federal debt ceiling. Further, chatters of US President Joe Biden’s call to four top US diplomats and arranging a meeting on May 09 also made rounds.

Furthermore, relief from the US First Republic Bank issue allowed traders to take a breather as the US regulators seized assets of the First Republic Bank and sold them to a new buyer, namely JP Morgan.

It’s worth noting that the latest statements from China Beige Book (CBB) suggesting that new data offer the first evidence of a truly robust 2023 recovery in the dragon nation, per analysts from CBB, also seem to favor the USD/INR bears. However, Axios came out with headlines suggesting the US allies’ preparations for the US-China war over Taiwan, which in turn keeps the Euro bears hopeful, via the US Dollar’s haven demand.

Amid these plays, S&P 500 Futures track Wall Street’s indecisiveness near 4,180, retreating from a three-month high, whereas the US 10-year and two-year Treasury bond yields ease from a one-week high to 3.55% and 4.13% at the latest.

Given the return of major markets, except for China, the USD/INR pair may witness a comparatively active trading session ahead. That said, the pair sellers, however, are likely to find hurdles should the risk appetite deteriorates. Also important to watch will be the US Factory Orders for March, expected to rise by 0.8% MoM versus -0.7% prior.

Technical analysis

The previous day’s Doji candlestick joins the downbeat RSI (14) to keep the USD/INR buyers hopeful unless the quote breaks an upward-sloping support line from early November 2022, close to 81.65 by the press time.