- USD/INR is staying in a narrow range above 82.20. Since the US Dollar is getting stronger, the trend seems to be up.
- Fed Powell has said that he thinks there will be one more rate walk this year. This has made the odds of hawkish Fed bets better.
- Fed Barr told investors that the failure of a few lenders would not spread to other businesses.
During the Asian session, the USD/INR pair is moving sideways in a narrow range above 82.20. The asset got off to a good start because investors didn’t pay attention to the overnight recovery in the US Dollar Index (DXY). When there was good buying interest near 102.40, the USD Index went up strongly. As the chances of one more rate walk by the Federal Reserve (Fed) have grown, the US Dollar Index wants to keep rising above 102.78.
After a great day of buying on Wednesday, the market seems cautiously optimistic as S&P500 futures have made only small gains in the Asian session. The demand for US government bonds is going down even more because people are expecting Fed chair Jerome Powell to raise interest rates again and because fears of banking trouble are going down.
The USD Index is getting stronger again because people are less sure that the Fed will keep its monetary policy steady. According to the CME Fedwatch tool, the chances of the Fed keeping its policy the same have dropped to 54%.
Investors now think that the US banking crisis won’t cause any more damage outside of the banking system. However, credit conditions will stay very tight. Michael Barr, Vice Chair for Supervision of the Federal Reserve (Fed), told the Senate Banking Committee that the US banking system is “sound and resilient.” This made people in the market feel better. He reassured investors that the failure of a few lenders couldn’t spread to a lot of other lenders.
In terms of the Indian rupee, the Reserve Bank of India (RBI) has given 18 countries permission to use the Indian rupee to pay for international payments. The slowdown in the world economy has made it possible to rely less on the US Dollar.
USD/INR
Source: Team CurrencyVeda
