USD/INR Price news: Indian rupee remains firm around 74.50 on cautious optimism, USD pullback

• USD/INR stays pressured around monthly low, keeps Tuesday’s losses intact.
• Market sentiment improves in absence of Russia’s retaliation to Western sanctions, ambiguity over border moves.
• INR swap premiums, upbeat US stock futures add to the bearish bias amid sluggish Asian session.
• Risk catalysts are the key but Japan’s holidays may restrict intraday moves.

USD/INR holds lower ground near 74.68 despite the latest bounce from the intraday low. In doing so, the Indian rupee (INR) pair drops 0.05% intraday while keeping the previous day’s losses during the late Asian session on Wednesday.

The quote remains below an upward sloping trend line from January 21 as a recently positive mood in the market weighs on the US dollar’s safe-haven demand.  US President Biden’s comments like, “We have no intention of fighting Russia,” seem to have tamed the fears of a full-fledged war between the West and Moscow, which in turn favored the latest risk-on mood. Additionally, comments from Japan’s Prime Minister (PM) Fumio Kishida, calling on Russia to return to diplomatic means, also allow bears to take a breather.

Also helping the USD/INR sellers is the jump in the INR forward premiums on the Reserve Bank of India’s (RBI) swap announcement. On Monday, the RBI mentioned that it will enter into sell-buy swaps worth $5.00 billion with banks on March 08 to extend the maturity profile of its forward dollar book.

Amid these plays, S&P 500 Futures consolidate recent losses with 0.40% intraday gains while the US Treasury yields remain inactive at around 1.94%, mainly due to Japan’s holiday, after rising around 2.0% daily in the previous day.

It should be noted that the equity markets in India snapped a five-day losing streak by the press time. That said, the BSE Sensex tracks US stock futures to print 0.50% upside on a daily basis.

Moving on, USD/INR traders will keep their eyes on the headlines concerning Russia-Ukraine for fresh impulse.

Read: If Russia does invade Ukraine, this could finally spark-off the crash 'puts' have been telegraphing

Technical analysis

A clear downside break of a five-week-old ascending trend line joins sustained trading below the 50-DMA and 100-DMA to keep sellers hopeful of revisiting the 200-DMA level near 74.35.