USD/INR oscillates within a narrow weekly range of 83.09-83.30

USD/INR trades slightly higher on the Fed’s likelihood of halting the interest rate-hike cycle.
The default situation by China’s Country Garden could potentially affect the Asian currencies.
The dovish comments from Fed policymakers are contributing to pressure on the US Dollar.
USD/INR appears to be consolidating within a narrow weekly range between 83.09 and 83.30. In the Asian session on Wednesday, the pair trades slightly higher than the previous close, hovering around 83.20.

The market sentiment seems to be influenced by expectations that the Federal Reserve (Fed) is considering a pause in its interest rate-hike cycle. This sentiment is driven by recent dovish comments from Fed officials, suggesting a more cautious stance on monetary policy.

The Reserve Bank of India (RBI) might intervene to suppress any upward momentum of the USD/INR pair by engaging in the sale of US Dollars (USD) in the non-deliverable forwards market.

The potential default situation by China’s Country Garden on a $15 million coupon payment indeed adds complexity to the Chinese economic situation. The challenges in the property sector, despite broader signs of recovery in China’s economy, warrant careful observation, especially considering potential implications for Asian currencies.

On the other hand, a series of dovish comments from Federal Reserve policymakers, expressing concerns about higher long-term US Treasury yields, is shaping the monetary policy narrative.

Atlanta’s Fed President Raphael Bostic’s assertion that the current policy is already restrictive, coupled with similar sentiments from other Fed colleagues, suggests a cautious approach to further rate hikes.

The US Dollar Index (DXY) trades around 105.80, by the press time, recovering from the intraday losses. The 10-year US Treasury bond yield stands at 4.64%. The market awaits the upcoming economic data, with Wednesday featuring the Producer Price Index (PPI) following the release of the FOMC meeting minutes and Thursday bringing the Consumer Price Index (CPI).