- USD/INR respected broad risk reset while stepping back from a three-week high.
- US President Trump signals deal with India, savings rate at home drops to a 15-year low.
- China’s coronavirus cases show a mixed reaction, rating giants keep flashing red signals.
- An absence of data at home will keep external catalysts in focus.
USD/INR declines to 71.52 as the Indian markets open for trading on Wednesday. The pair’s latest surge to 71.83 repeated the habit of being short-lived amid risk reset in Asia. However, broad challenges to the Indian economy remain standby.
With the World Health Organization’s (WHO) urge to keep calm over China’s coronavirus death toll, which crossed 2,000 mark as of February 20, joined optimism spread by Chinese President Xi Jinping. The diplomat ruled out Moody’s downbeat growth forecast while expecting the GDP growth to meet the mark in 2020 despite coronavirus threats.
Also on the positive side could be US President Donald Trump’s comments saying, “We will have a really big trade deal with India, maybe after November US election.”
Even so, Moody’s raises doubts on the Asian credit conditions while also downgrading Indian growth forecasts to 5.4% versus 6.6% prior. Furthermore, data from the Central Statistical Organisation shows that the Indian gross savings slump 30.1%, the lowest since 2003/04.
While portraying the market sentiment, the US 10-year treasury yields stay mildly positive to 1.566% with the risk recovery in Asia. It’s worth mentioning that risk reversals suggest the options market is most bullish on the USD/INR pair in over four months.
Given the absence of major data/events at home, traders will keep eyes on the headlines from China as well as the US statistics for near-term direction.
Technical Analysis
A gradual higher high formation poses a serious challenge to 72.00 round-figure. Though 72.2 and January month high near 72.60 stay as a tough nut to crack for the buyers. On the downside, a five-week-old rising trend line near 71.25 acts as the key support.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.