The USD/INR rose as a spike in coronavirus cases across the world
|The USDINR pair made a gap-up opening at 74.58 levels and traded in the range of 74.58-74.92 with an upside bias. The pair finally closed at 74.87 levels. The RBI set the reference rate at 74.7148 levels. The USDINR rose as a spike in coronavirus cases across the world as well as concerns about a new strain of the virus in South Africa dampened investor sentiment for riskier assets.
Investors became concerned that a surge in COVID cases globally could prompt authorities to impose lockdowns to limit the spread of the virus, which could derail the nascent economic recovery. Moreover, a slump in domestic equity indices further added fuel to upmove in the pair. Market participants said that importers also stepped in to buy dollars today to cover their existing bets as financial markets in the US were closed on Thursday on account of Thanksgiving. This further weighed on the local unit. On an annualized basis, the premium on the one-year, exact-period dollar/rupee contract was at 4.71% compared with 4.83% at the close on Thursday.
The resurgence of COVID-19 cases in Europe and subsequent lockdowns in some regions had also impacted market sentiment. Core consumer prices in Tokyo rose at the fastest pace in over a year in November, data showed, as electricity and fuel costs surged due to higher global energy prices. Oil prices recorded their steepest daily fall since July as a new COVID-19 variant spooked investors and added to concerns that a supply surplus could swell in the first quarter.
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.