Ella 
USD/INR fell slightly to around 83.30-25 earlier on Wednesday, consolidating near record lows. The pair was also boosted by a drop in WTI crude oil prices, India’s main import burden, ahead of the release of the Fed minutes, also reflecting market consolidation.
A retreat in U.S. 10-year Treasury yields from yearly highs and a pause in losses in U.S. stock futures, while Asian stock markets were mixed, reflected cautious optimism in the market.
WTI crude oil fell 0.5 percent to $880.25, with bears testing a one-week low hit the previous day, amid concerns over falling demand in China, one of the world’s largest crude consumers.
Elsewhere, the U.S. dollar index hovered around 103.20, testing falling resistance five months ago, at a one-month high.
It should be noted that poor Chinese data for July, coupled with a surprise rate cut by the People’s Bank of China and downgrades of key US corporates will weigh on sentiment and challenge the latest USD/Rupee pullback.
Even so, upbeat U.S. data and hawkish Fed discussions weighed on euro prices. U.S. retail sales rose 0.7% month-on-month in July, compared with expectations of 0.4%, and the previous value was revised from 0.2% to 0.3%. Details showed that core retail sales rose 1.0%, the market expected 0.4%, while the retail sales control group rose 1.0%, the previous value was revised to 0.5% from 0.6%. In addition, the New York Fed manufacturing index fell to -19.0, the previous value was 1.1, and the market expected -1.0, while the US export price index and import price index improved in July, but the annual rate fell slightly. Minneapolis Fed President Neel Kashkari ruled out discussion of policy pivots late Wednesday, citing high inflation and uncertainty about the Fed’s progress in curbing it. The policymaker also said he was not ready to say the Fed was done raising rates, according to Reuters.
It should be noted that upbeat Indian inflation data released earlier this week contrasted with the RBI’s stance on hold, challenging the latest pullback in USD/Rupee.
Traders were likely to be boosted by U.S. industrial output and housing data for July, ahead of the release of the minutes of the Federal Reserve meeting. Fed officials preparing to raise interest rates before a policy inflection point could drive the pair further higher.
