USD/INR Price News: Rupee ignores IMF’s India 2021 growth forecast ahead of Fed
- USD/INR consolidates the heaviest daily gains in a week, offered near intraday low.
- IMF cuts India’s 2021 GDP forecast to 9.5%, China's growth predictions cut by 0.3% to 8.1%.
- India reports 43,654 covid infections, the highest since July 08.
- No rate change, tapering is expected from Fed but Powell’s word will be the key.
USD/INR stays pressured around 74.45, down 0.16% intraday, during early Wednesday. In doing so, the Indian rupee (INR) pair consolidates the previous day’s gains despite downbeat catalysts for India.
Among them, the International Monetary Fund’s (IMF) downward revision to the Asian nation’s FY 2021 GDP forecasts to 9.5%, versus 9.8% prior expectations, gains major attention. The international lender cites “a lack of access to vaccines and renewed waves of COVID-19 cases” as the key catalysts behind the downgrade in GDP predictions, per Reuters. It’s worth noting that the IMF also cut China’s economic forecast to 8.1% while keeping global growth expectations of 6.0%.
Also on the negative side were the latest coronavirus numbers as the daily infections jumped to three weeks high after easing to March lows the previous day.
On a broader front, the US revised mask mandate and virus figures from Australia’s New South Wales jumped to March 2020 levels. Furthermore, the UK registered the highest virus-led deaths in four months on Tuesday.
Other than the IMF predictions and covid headlines, the US-China tussles and Beijing’s crackdown on IT and education stocks also weigh on the market sentiment, not to forget pre-Fed caution, defending the US dollar from the bears.
Against this backdrop, stock futures print mild losses and the US 10-year Treasury yields pause the recovery moves by the press time.
Moving on, USD/INR traders will keep their eyes on the Fed announcements for near-term direction as inflation pick-up in India fails to direct the Reserve Bank of India (RBI) of late.
Read: Fed Interest Rate Decision Preview: The horns of a inflation dilemma
Technical analysis
Intraday USD/INR up-moves remain capped by 74.60, comprising 21-DMA, but the downside stays doubtful before breaking late June’s low near 74.05.