Ella 
USD/INR attempted to break below the winning streak that began on September 12, with the pair trading lower in Asia on Wednesday, trading lower around 83.20.
However, USD/INR found upside support, driven by higher US Treasury yields. USD/INR is likely to break above the intraday high of 83.29 followed by the psychological 83.50 mark. However, market participants expect the Reserve Bank of India (RBI) to intervene by selling greenbacks in an attempt to slow the dollar’s gains.
Additionally, rising crude oil prices have put downward pressure on the Indian rupee (INR) as India relies heavily on oil imports to meet its energy needs. In addition, soaring oil prices have widened India’s trade deficit gap.
In the Asian market on Tuesday, the U.S. dollar index fluctuated. Initially, market sentiment soured, with the U.S. Dollar Index falling as low as 104.80 points. However, U.S. Treasury yields rose and the U.S. Dollar Index quickly rebounded to break above the 105.00 level once again.
At press time, the U.S. dollar index was trading higher near 105.20, with U.S. Treasury yields higher and the U.S. dollar index firming. At press time, the U.S. 10-year Treasury yield was 4.36%, below its highest level in 16 years.
Investors expect the Fed to keep interest rates in their current range of 5.25%-5.50% in September. Additionally, the odds of another rate hike during the November and December meetings have diminished, according to the CME FedWatch Tool.
However, market sentiment appears to be that the Fed will maintain higher policy rates for an extended period, which could support the dollar. This is attributed to the resilience of the U.S. economy, reflected in easing inflationary pressures and continued growth in the labor market.
