Indian rupee adds to weekly gains below 75.00 on cautious optimism
- The USD / INR fades, rebounds from its two-week low and falls for the second week in a row.
- India praises a billion vaccinations, China’s Evergrande adds to the positives.
- Inflation fears, pre-PMI caution defy market bulls amid Fed chatter.
USD / INR reverses yesterday’s corrective pullback from a fortnightly low ahead of Friday’s European session. That said, sellers of the Indian Rupee (INR) pair are attacking intraday low near 74.80, down 0.09% at press time.
In doing so, the INR bulls are applauding the billion home covid vaccines, as well as the growing optimism of Finance Minister Nirmala Sitharaman, as described in her speech earlier this week. Recently, Indian Prime Minister Narendra Modi hailed the promise to strike the majority of the country’s population and bring the risk of the virus under control.
Also favoring the Asian currency could make the headlines of the Chinese newspapers at risk. Aside from the hopes of the Sino-U.S. Phase 1 trade deal, Evergrande’s ability to pay off the bond coupons and the gossip that Hopson is still interested in the struggling firm’s assets, despite the latest failure to seal the deal. Okay, brighten up the mood in Asia.
Elsewhere, New York Federal Reserve (Fed) Chairman John Williams is the latest to reiterate inflation fears following Fed Governor Christopher Waller and Randal Quarles, as well as Cleveland Fed Chairman Loretta Mester .
While inflation fears and Fed struggles are supporting US Treasury yields, the US Dollar Index (DXY) fails to sustain yesterday’s recovery moves, down 0.03% intraday to around of 93.73 at the latest.
Therefore, USD / INR traders seek clarity and can wait for US PMIs, as well as a speech by Fed Chairman Jerome Powell, to be released later today, for further impetus.
The pullback from a double top around 75.65 directs USD / INR traders towards a seven week old support line near 74.55.