Rupee bears poke 75.00 with eyes on India cabinet meeting

• USD/INR prints a four-day uptrend, remains sidelined of late.
• India reports lower active coronavirus cases in eight months.
• PM Modi to chair meeting of cabinet committee on investment and growth.
• US dollar stays firmer despite risk-on mood, sluggish Treasury yields.

USD/INR defends the 75.00 threshold during the fourth day of advances heading into Tuesday’s European session. In doing so, the Indian rupee (INR) pair tracks the US dollar gains while paying a little heed to the recent positive catalysts from India ahead of the key cabinet meeting.

As per the latest updates from an anonymous Indian official, shared by Reuters, “India Prime Minister (Narendra Modi) to chair meeting of the cabinet committee on investment and growth at 10:30 am today (India time).” The details suggest that India Finance Minister, Commerce Minister, Niti Aayog CEO be part of the cabinet panel meeting.

It should be observed that the nation’s fundamentals have recently been improving amid a strong vaccination drive. The same weighs on the on covid infections and allowed the Reserve Bank of India (RBI) to stay optimistic during the latest monetary policy meeting.

However, a jump in the energy prices and inflation fears have been spotted of late, which in turn could push policymakers towards any major decision ahead of the festival season.

That being said, India’s active coronavirus cases fall to the lowest since February 27, per Reuters. Further information hints at the 356 covid fatalities versus 443 reported yesterday whereas 12,428 daily run-up in cases, the lowest since March 02, compared to 14,306 reported the previous day.

On the other hand, US Dollar Index (DXY) keeps the previous day’s rebound from a monthly low, up 0.06% intraday around 93.90 by the press time. The greenback gauge seems to portray the market’s cautious mood ahead of the all-important US advance GDP release for the third quarter (Q3), up for publishing on Thursday.

Looking forward, risk catalysts are likely to entertain the USD/INR traders, mostly keeping the bullish impulse ahead of the US GDP data.

Technical analysis

A clear upside break of a two-week-old descending resistance line, now support around 74.98, keeps USD/INR buyers hopeful.