- USD/INR stays mildly bid near the highest levels since April.
- Stocks in Asia-Pacific stay pressured around one-week low, Treasury yields pare early losses.
- Covid woes, indecision over Fed’s next moves propel bullish bets on DXY to over a year’s high.
- Qualitative catalysts remain crucial for near-term trade direction.
USD/INR prints mild gains around 74.75, up 0.16% intraday, while rising for the third consecutive day to refresh multi-day top amid Monday’s Asian session. Alike other currency pairs on the board, the Indian rupee (INR) pair also justifies the US dollar’s safe-haven demand amid the coronavirus (COVID-19) woes.
Although the latest covid data from India have been less worrisome compared to other Asia-Pacific friends, fears that the virus variant will reverse the economic recovery from the pandemic keep the USD/INR prices high.
That said, the Indian Health Ministry data, per Reuters, suggest that India reports a 38,164 daily rise in covid infections, taking a total to 31.14 million and 499 daily rise in the virus-led fatalities. On the other hand, the UK reports over 50,000 cases but still braces for “Freedom Day”. Elsewhere, Australia prepares for extending local lockdowns beyond this Tuesday’s deadline in Sydney.
These plays add to the US Dollar Index (DXY) strength, due to its risk-safety allure. Also favoring the DXY bulls could be the indecision over the Fed’s next moves as policymakers reject the need for tapering and rate hike but the data suggests otherwise. As a result, the Financial Times (FT) came out with the news saying, “Bets that greenback index will rise have jumped to the highest level in more than a year.”
It’s worth noting that the recently refreshing US-China tussles also put a bid under the US dollar. Earlier in the day, Bloomberg recently said, “US Congress is aiming to hobble China’s ability to recruit scientists and academics in the US as part of broader moves in Washington to confront the Asian nation’s growing clout.” Following that, Treasury Secretary Janet Yellen said, per New York Times (NYT), that the China trade deal has hurt American consumers.
Given the risk-off mood helping the US dollar amid a light calendar, USD/INR prices are likely to remain bid but the bulls may remain cautious near multi-day top.
Technical analysis
A daily closing beyond the monthly resistance line, around 74.90, will direct USD/INR bulls to the yearly top surrounding 75.65, failing to do so can trigger a pullback move towards two-week-old support line near 74.50. Overall, bullish momentum remains intact until the quote stays beyond 73.70-65 support confluence including 50-day and 100-day SMAs.
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 extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.