USD/INR jumps back above 74.00 after S&P cuts India’s growth forecast

The Indian rupee fails to sustain the opening gains against the US dollar, as USD/INR jumps back above the 74 handle amid bearish India’s fundamentals, as coronavirus spreads.

The spot hit a low of 73.74 in the opening trades, tracking the weakness in the US dollar across the board. The greenback is on a corrective move lower across its main peers so far this Wednesday, having surged to monthly tops near 99.82 in US last session on increased funding stress.

However, USD/INR managed to find some support at the lower levels, as the Indian rupee lost ground after S&P Global Ratings downgraded India’s 2020 GDP growth estimate to 5.2% vs. 5.7% predicted earlier, as the global economy is entering a recession amid the coronavirus pandemic.

Shaun Roache, Chief Asia-Pacific Economist at S&P Global Ratings, said: “An enormous first-quarter shock in China, shutdowns across the US and Europe, and local virus transmission guarantees a deep recession across Asia-Pacific.”

Moreover, the rebound in oil prices from 49-month lows also adds to the renewed weakness seen in the rupee. Oil prices fell to fresh multi-year low amid intensifying global recession fears and ongoing Saudi-Russia price war.

All eyes remain on the coronavirus-related updates from India and globally for fresh trading impetus, as the US prepares to announce a big and bold economic stimulus to fight the virus outbreak.

USD/INR technical levels to watch