• USD/INR is looking to extend its recovery above 82.00 amid a recovery in the USD Index.
• A consecutive 25bp rate hike is highly anticipated as US core inflation has shown evidence of extreme stubbornness.
• India's FX reserves jumped to a 9-month high of $584.76 bln for the week ended April 7.

The USD/INR pair is aiming to extend its recovery above the critical resistance of 82.00 in the Asian session. The major has been supported by strength in the US Dollar on expectations that the Federal Reserve (Fed) will continue its rate-hiking spell further in May’s monetary policy meeting.

A consecutive 25 basis point (bp) rate hike is highly anticipated by the market participants as the United States' core inflation has shown evidence of extreme stubbornness. Meanwhile, households' demand contracted dramatically in March but looks insufficient to impact hawkish Fed bets.

Fed Governor Christopher Waller said on Friday that despite a year of aggressive rate increases, U.S. central bankers "haven't made much progress" in returning inflation to their 2% target and need to move rates higher still. He further added “The job on inflation was still “not done,” as inflation remains “far too high.”

Meanwhile, S&P500 have generated some gains in the Asian session after easing on Friday, indicating a minor recovery in the risk appetite of the market participants. The US Dollar Index (DXY) has shown a minor correction after failing to extend recovery above 101.80.

On the Indian Rupee front, India's FX reserves jumped to a 9-month high of $584.76 bln for the week ended April 7. Meanwhile, buying spree by Foreign Institutional Investors (FIIs) in Indian equities amid the annual result season could provide some strength to the Indian rupee.

Meanwhile, the recovery in US Dollar has weighed pressure on oil prices. It is worth noting that India is one of the leading importers of oil and some correction in the oil price will support the US Dollar.