- Rupee strengthens on ongoing foreign inflows.
- USD/INR losses to be capped by US-China trade/ political risks.
- Markets await FOMC minutes for fresh directives.
The Indian Rupee stalled its recovery from three-day lows vs, the US dollar, as the USD/INR bears take a breather near 71.75 region, at the press time.
The spot hit a low of 71.65 last hour after the Indian currency was boosted on the extended foreign inflows, in the wake of ArcelorMittal’s takeover of Essar Steel. However, the downside in USD/INR remains cushioned by the increased safe-haven demand for the US dollar across its main competitors amid renewed US-China tensions led risk-aversion.
Apart from the ongoing US-China trade uncertainty, fresh trouble brewed between both the countries on the political front after the US Senate approved the Hong Kong human rights bill late-Tuesday. Beijing threatened to retaliate against the US political meddling into Chinese domestic affairs.
Looking ahead, the pair will remain at the mercy of the USD price-action and risk trends amid US-China political woes and ahead of the key FOMC Oct meeting’s minutes that could throw fresh light on the US interest rates outlook amid growing overseas risks.
USD/INR Levels to watch
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