- USD/INR extends pullback from weekly top, refreshes intraday low of late.
- India covid recovery rate risen 97.19% amid record infections, death tolls elsewhere in Asia-Pacific.
- Fitch cuts India growth forecast, India–UK negotiations on free trade agreement will begin during late 2021.
- Risk-off mood backs US dollar amid a light calendar, virus updates are the key.
USD/INR takes offers around 74.63, down 0.15% intraday, amid the initial Indian session trading on Friday. In doing so, the Indian rupee (INR) pair drops for the second consecutive day after refreshing the weekly high amid the coronavirus (COVID-19)-led risk-off mood.
While the market sentiment remains sluggish amid fears of the covid resurgence and variants, India registers a jump in the recovery rate to 97.19% on Friday, per the latest report from Health Ministry. Reuters conveys additional details as, “India reports 44,459 daily rise in recoveries; total recoveries at 29.89 million, active cases at 458,727.”
Read: Coronavirus Update: South Korea marks record infections, NSW hints another week-long lockdown
Also favoring the USD/INR prices could be the headlines suggesting optimism over the India-UK free trade agreement talks. The latest update from NewsRise shared by Reuters hints at the late 2021 discussion over the much-awaited trade talks.
On the negative side, global rating giant Fitch cut, per Financial Express, India’s growth forecast to 10 per cent for the current fiscal, from 12.8 percent estimated earlier, due to slowing recovery post-second wave of COVID-19, and said rapid vaccination could support a sustainable revival in business and consumer confidence.
Amid these plays, the US dollar index (DXY) picks up bids while tracking the US Treasury yields rebound.
Looking forward, USD/INR traders need to pay close attention to the covid headlines as the nation’s surprise positive on the covid, when the majority of the neighbours suffer, could derail soon, posing downside risk to the pair.
Technical analysis
While mid-April lows highlight 74.55 as the key immediate support, an ascending support line from May 31 also challenges the USD/INR sellers around 74.48. Meanwhile, up-moves can keep eyeing the 75.00 threshold.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.