- USD/INR traders await fresh economic clues amid on-going trade pessimism.
- Indian Industrial Output, the US PPI will be in the spotlight with trade/political news likely offering background music.
Despite market positive news from India, the USD/INR pair fails to portray much momentum while taking rounds to 70.50 ahead of Friday’s European session open.
Speculations that the government will exempt the Foreign Portfolio Investors (FPIs) from additional surcharge have pleased the Indian traders. However, the on-going drama surrounding the US and China’s trade tussle keep prices in check. The latest news concerning the issue signals the US delaying licenses to do business with China’s Huawei and warning the dragon nation of further sanctions, ending trade talks on a conditional basis.
With this, investors now await June month Industrial Production data from India, followed by the US Producer Price Index (PPI) ex Food & Energy data for July, for fresh impulse.
Forecasts suggest the Industrial Output to weaken from 3.1% to 1.5% while PPI catalyst from the US could inch up to 2.4% from 2.3% YoY but might soften to 0.2% versus 0.3% earlier on MoM basis.
While latest rate cut from the Reserve Bank of India (RBI) and market’s higher focus on news/headlines dims importance of such a second-tier data, absence of other major drivers could result in magnified response.
Technical Analysis
Trend: Pullback expected
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