USD/INR Price News: Indian rupee bounces off record low past 79.00 as oil slips on recession fears
- USD/INR consolidates recent rally around all-time high, pressured near intraday low of late.
- Oil prices slumped as global economic slowdown joins supply woes.
- Market fears underpin USD’s safe-haven demand but anxiety ahead of key data/events trigger corrective pullback.
- FOMC Minutes, US ISM Services PMI to decorate calendar, risk catalysts are the key.
USD/INR takes offers to pare recent gains as global markets consolidate the previous day’s risk-off mood ahead of the Federal Open Market Committee (FOMC) Minutes and the US ISM Services PMI for June. That said, downbeat prices of oil also favor the pair’s pullback towards 79.10 during Wednesday’s mid-Asian session.
WTI crude oil remains pressured around a three-month low, down 0.05% intraday near $97.70 by the press time, as energy traders keep fearing a slump in the demand amid recession woes. That said, the black gold marked the biggest daily loss since March, also refreshed a three-month low, while falling around 9.0% the previous day.
No optimism towards supply-chain improvement amid the escalation in the Russia-Ukraine tussles joins fears of fresh covid-led lockdowns in China to amplify recession risks. The pessimism intensified after Germany and Italy flashed economic warnings while the Bank of England (BOE) also released a report conveying the grim economic outlook.
Additionally, hawkish bets on the major central banks’ next moves and upbeat US data also propel the risk-off mood, which in turn underpin the US dollar’s safe-haven demand. On Tuesday, the US Factory Orders for May, to 1.6% MoM versus 0.5% expected and upwardly revised 0.7% previous readings.
It should be noted that the recently downbeat oil prices also help the USD/INR traders to expect relief from the record trade deficit as India is a net importer of its energy demand. With this in mind, Nomura cites, “weakening India BoP dynamics, aggressive Fed hikes and rising US recession risks,” to aim for the 82.00 level for the USD/INR.
Technical analysis
USD/INR pullback remains elusive until the quote remains beyond the previous weekly range, between 79.10 and 78.85. That said, the 80.00 threshold lures the bulls.