• USD/INR picks up bids to reverse the previous day’s pullback from a record high.
• Risk-aversion, firmer USD join INR NDFs, rebound in oil prices to keep pair buyers hopeful.
• US Core PCE Price Index awaited, recession fears hint at the further upside.

USD/INR regains upside momentum, after stepping back from a record top near 79.00 the previous day, even as the USD retreats during Thursday’s Asian session. That said, the pair picks up bids to 78.92 at the latest, following the all-time high of 79.09 marked on Wednesday.

The Indian rupee (INR) pair’s latest gains could be traced to the firmer oil prices, up 0.40% around $110.00 by the press time. Given the Indian dependence on energy imports, strong oil prices weigh on the INR amid a record budget deficit.

At home, the bullish bets on the Non-Deliverable Forwards (NDF) hint at the further USD/INR upside. Reuters conveys the latest USD/INR NDFs around 79.10.

Elsewhere, the risk-off mood challenges the INR prices, even if the US dollar retreats from a two-week high. That said, the major central bankers’ readiness to battle inflation, even at the cost of short-term economic slowdown, recently exerts downside pressure on the market sentiment. Fed Chairman Jerome Powell mostly repeated his latest pledge to battle inflation with readiness to announce another 0.75% rate hike if needed. The Fed Boss also praised the US economic strength and helped the US dollar to remain firmer. ECB President Christine Lagarde, on the other hand, signaled chances of a heavier rate increase in September while also expecting positive growth rates. Further, BOE Governor Andrew Bailey raised concerns about real income shock.

While the USD/INR buyers are bracing for the fresh record high, they would wait for the Fed’s preferred inflation gauge for May, namely the Core Personal Consumption Expenditure (PCE) Price Index, expected 0.4% MoM versus 0.3% prior, for fresh impulse.

Technical analysis

Any pullback remains elusive until USD/INR stays above the previous resistance line from early March, at 78.60 by the press time.