• USD/INR is consolidating in a narrow range above 82.20, upside seems favored amid a recovery in US Dollar.
• The odds of hawkish Fed bets have improved as Fed Powell has anticipated one more rate hike this year.
• Fed Barr assured investors that the failure of a couple of lenders is unable to lead to a widespread contagion.

The USD/INR pair is displaying a sideways performance in a narrow range above 82.20 in the Asian session. The asset registered a positive opening as investors discounted overnight recovery in the US Dollar Index (DXY). The USD Index rebounded firmly after sensing decent buying interest near 102.40. The US Dollar Index is looking to extend its recovery above 102.78 as odds for one more rate hike by the Federal Reserve (Fed) have strengthened.

The market sentiment looks cautiously optimistic as S&P500 futures have eased nominal gains in the Asian session after a stellar buying on Wednesday. The demand for US government bonds is easing further amid anticipation of one more interest rate hike by Fed chair Jerome Powell and ebbing banking turmoil fears.

The USD Index is regaining traction as bets for steady monetary policy by the Fed have trimmed. As per the CME Fedwatch tool, chances for an unchanged policy stance by the Fed have been trimmed to 54%.

Investors are now anticipating that the US banking crisis won’t have more collateral damage, however, the credit conditions will remain extremely tight. The commentary from Federal Reserve (Fed) Vice Chair for Supervision Michael Barr to Senate Banking Committee that the United States banking system is ‘sound and resilient’ brought a sense of relief for the market participants. He assured investors that the failure of a couple of lenders is unable to lead to a widespread contagion.

On the Indian rupee front, the Reserve Bank of India (RBI) has allowed 18 countries to pay off international payments through Indian Rupee. The global economic slowdown has delivered an opportunity to trim dependence on US Dollar.