USD/INR Can't Sustain 50-Day MA Break ​​

USD/INR has edged higher in early trade (last 78.75) but is finding selling interest closer to 78.80. Note the pair is back above the 50 day MA, which comes in at 78.73. Yesterday's break below this level was not able to be sustained. Higher US yields is impacting sentiment, but INR has outperformed the likes of THB, PHP and IDR so far during today's session.

• Data has been disappointing, with the July trade deficit hitting a record wide of -$31bn. Exports dropped in the month, while imports remained flat. We could see some relief going forward though given lower commodity prices globally and likes seasonal import demand.
• The services PMI also dipped to 56.6 from 58.2 last month, in contrast to the improving trend for the manufacturing PMI.
• The Indian Finance Minister, Nirmala Sitharaman, has also come out in defence of the local currency. The minister stated the rupee is not collapsing and is outperforming peers. She also stated that the RBI doesn't target a specific level of the currency but targets excessive volatility.
• Net equity inflows have also been quite firm over recent sessions, over $1.5bn from late last week, but with the domestic equity rally slowing (local stocks off -0.50% today), such inflow momentum may also ease.