• USD/INR slides to near 76.50 amid a minor correction in DXY.
• The confluence of demand and supply worries has complicated the situation for investors.
• A jumbo rate hike expectations have bolstered after Fed Powell stated that a 50 bps rate hike is on cards.

The USD/INR pair has witnessed a steep fall at open and is establishing below 76.50 as oil prices fall on global demand worries. The asset has remained in positive territory this month amid a strong upside in the greenback.

Oil prices are going through a rough time these trading sessions as a significant cut in the global growth forecasts by the International Monetary Fund (IMF) and supply worries due to the prohibition of Russian oil by the Western leaders has complicated the situation for the market participants. However, the recent price action indicates that demand worries have been underpinned by investors, which is why oil prices have lost the psychological support of $100.00.

Meanwhile, a minor pullback has been displayed by the US dollar index (DXY) in the late Asian session. The DXY has printed a fresh two-year high at 101.86 as expectations of a jumbo rate hike by the Federal Reserve (Fed) have bolstered. The odds of a 50 basis point (bps) rate hike by the Fed are substantially higher after Fed chair Jerome Powell stated that a rate hike of half a percent in May is on the cards. Also, the thinks tanks in the market are expecting the outset of balance sheet reduction sooner. The agenda of withdrawing helicopter money from the market will result in weakness for the risk-sensitive assets.