USD/INR Price News: Indian Rupee stays defensive around 82.00 amid mixed concerns about India, Fed

• USD/INR remains sidelined after two-week downtrend, edges higher of late.
• Reuters poll suggests upbeat India growth but dicey employment conditions.
• US Dollar Index fades upside momentum as markets brace for Fed Chair Powell’s speech.
• US PMI, Q2 GDP will offer busy week ahead, risk catalysts eyed too.

USD/INR grinds higher past 82.00, mostly defensive around 82.05 amid early Monday, as it consolidates the previous two-week downtrend during the market’s cautious mood ahead of the top-tier US data/events. In doing so, the Indian Rupee (INR) pair also struggles to justify the mostly upbeat Reuters poll about the Asian economy.

That said, Reuters' latest poll of 53 economists, conducted between July 01 and 21, suggests that the nation could grow at an annual pace of 6.1% during the current fiscal year, as well as register the 6.5% growth rate in the next year. The survey, however, also mentioned that the employment situation will only improve slightly. It’s worth noting that the survey’s outlook for the Indian economy remains the same while suggesting a leapfrog toward gaining the status of a developed nation.

It should be noted that the US Dollar’s retreat prods the USD/INR buyers while the upbeat prints of the Oil price put a floor under the Indian Rupee (INR) pair due to the nation’s heavy reliance on energy imports.

With this, the US Dollar Index (DXY) licks its wounds around the intraday low near 101.00. On the other hand, WTI crude oil remains indecisive near $76.75, making rounds to the highest levels in three months as energy traders struggle to digest mixed comments from International Energy Agency (IEA) Executive Director Fatih Barol and United Arab Emirates (UAE) Energy Minister Suhail al-Mazrouei at the Group of 20 (G20) energy ministers’ meeting held in India.

During the last week, the US housing numbers and regional manufacturing indices were mostly downbeat but an improvement in the Retail Sales Control Group for June allowed the DXY to rebound from a 15-month low, as well as post the first weekly gain in three. Previously, the upbeat prints of the University of Michigan’s (UoM) Consumer Sentiment Index and consumer inflation expectations for July helped the greenback to challenge the bearish bias.  It’s worth noting, however, that the US Consumer Price Index (CPI) and Producer Price Index (PPI) for June joined the first below-expectations Nonfarm Payrolls (NFP) in 15 months to tease the Federal Reserve’s (Fed) policy pivot past July and drowned the US Dollar.

Hence, the US Dollar’s previous week’s rebound from the 15-month low appears elusive and hence speech from Fed Chair Jerome Powell will be crucial to watch. Additionally important will be the first readings of the US second-quarter (Q2) 2023 Gross Domestic Product (GDP) and July PMIs.

Technical analysis

Despite the latest corrective bounce, a clear reversal from the 200-DMA hurdle, as well as a downside break of the previous support line stretched from mid-April, respectively around 82.20 and 82.10, keeps the USD/INR bears hopeful of revisiting the monthly low of around 81.75.