USD/INR Price News: Indian rupee stays defensive around 79.80 on RBI intervention hopes
- USD/INR holds lower ground after reversing from monthly high.
- Hopes that RBI wound intervene to defend the INR from refreshing record low favor pair sellers of late.
- Softer yields, sluggish session add strength to pullback moves.
- Preliminary US PMIs for August, housing numbers may entertain traders.
USD/INR holds onto the previous day’s retreat from the monthly peak, despite recent action surrounding 79.85, amid hopes of that the Reserve Bank of India (RBI) would defend the Indian rupee (INR) from refreshing all-time low. Also keeping the pair sellers hopeful during early Tuesday in Europe is the sluggish session and a pullback in the US Treasury yields, as well as the US Dollar Index (DXY).
“The Indian rupee was set to open flat against the dollar on Tuesday amid a weak risk appetite and on expectations that the Reserve Bank of India would step in to prevent the local unit from touching a new record low,” said Reuters.
The news also mentioned that the RBI has been selling dollars to shield the rupee from the volatility fuelled by the U.S. Federal Reserve's aggressive rate hikes. India's foreign exchange reserves have dropped to its lowest level since November 2020.
Alternatively, the US Dollar Index (DXY) retreats from the monthly high, down 0.08% intraday near 108.87 at the latest. With this, the greenback’s gauge versus the six major currencies tracks the US Treasury yields as the benchmark 10-year bond coupons drop two basis points (bps) to 3.02% at the latest.
Moving on, the preliminary readings of the US PMIs for August will join the US New Home Sales for July and Richmond Fed Manufacturing Index for August to decorate today’s calendar. However, Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium, up for publishing on Friday, will be crucial for clear directions.
Technical analysis
Despite the latest pullback, USD/INR remains above the 79.70 range support, which in turn keeps the pair buyers hopeful.