USD/INR retreats from the seven-week high as Indian Rupee (INR) sellers take a breather ahead of the key United States data on early Friday. That said, the quote prints mild losses near 82.85 by the press time, despite staying firmer for the third consecutive week.
In doing so, the USD/INR pair takes clues from the options market as the one-month risk reversal (RR) of the USD/INR, a measure of the spread between call and put prices, prints the biggest daily number in one week. Additionally portraying the USD/INR options market optimism is the upbeat print of weekly RR, following the negative marks of the previous week. In both cases the risk reversal figure is 0.035.
It’s worth noting that the USD/INR pair’s latest pullback could be linked to the optimism surrounding China’s pro-growth policies. However, the Sino-American tussles contradict the move and challenge the pair sellers.
Further, a lack of momentum in the bond markets seems to restrict immediate USD/INR moves as traders await the US Core Personal Consumption Expenditure (PCE) – Price Index and Durable Goods Orders for November ahead of a holiday-shortened final week of 2022.
Also read: Pre-Christmas US Data Preview: Core PCE and Durable Goods may extend US Dollar retreat