USD/INR hovers above 5-week low ahead of Fed Chair Powell’s testimonies

Key points

USD/INR edged higher on Monday, with the rupee tracking a drop in other Asian currencies, while market players were on the lookout for clues regarding the Federal Reserve’s interest rate path ahead of congressional testimonies by Fed Chair Jerome Powell later in the week.

Asian currencies were a notch weaker at the start of the week, while the US Dollar Index was almost without change following its steepest decline in five months last week.

The Dollar Index retreated over 1% after a string of mixed US macro data and as the Federal Reserve left borrowing costs without change. Still, the central bank flagged two additional rate hikes by the end of the year.

Markets are now pricing in a 69% chance of a 25 basis point interest rate hike at the Fed’s policy meeting in July.

Federal Reserve Chair Powell is to testify at the House Financial Service Committee on Wednesday and at the Senate Banking Committee on Thursday at 10 AM Eastern Time. Powell is expected to reiterate remarks from his post-FOMC meeting press conference.

US markets are to remain closed on Monday for the Juneteenth National Independence Day.

As of 7:07 GMT on Monday USD/INR was inching up 0.08% to trade at 81.9530. Last Friday the exotic Forex pair went down as low as 81.8500. The latter has been the pair’s weakest level since May 9th (81.7500).

Elsewhere, USD/JPY was down 0.13% on Monday, USD/CNH was gaining 0.42%, USD/TWD was up 0.39%, USD/SGD was up 0.21%, USD/IDR was up 0.43% and USD/KRW was gaining 0.38%.