USD/INR Price News: Indian rupee stays firmer around two-month top below 72.50
- USD/INR remains on the back foot around March lows.
- Economic relief measures from Indian government, receding covid counts favor pair sellers.
- India GDP, risk headlines eyed for fresh impulse.
USD/INR holds lower ground near 72.36, down 0.05% intraday, amid the initial Indian session on Monday. The Indian rupee (INR) pair dropped the most since late April on Friday amid the broad US dollar selling and hopes of an end to the coronavirus (COVID-19) second wave in India.
The optimism of the USD/INR bears gained momentum during the weekend on news suggesting the Indian government’s extension of the Emergency Credit Line Guarantee Scheme (ECLGS). Also, the Asian country’s latest covid infection numbers around 25.69 million, coupled with 2.03 million virus-led deaths, prints a downward sloping path and backs the INR bulls. Additionally, news that India's Serum institute will increase AstraZeneca vaccine production from 65 million to 90m million doses per month in June offered an extra strength to the INR.
It should, however, be noted that the cautious sentiment ahead of the Q1 GDP for the Indian economy, expected +1.0% versus 0.4% prior, keeps the pair sellers in check. “India's economic growth likely picked up in the January-March quarter from the previous three months, but economists have grown more pessimistic about this quarter after a harsh second wave of COVID-19 hit the country last month,” said Reuters before publishing.
Elsewhere, hopes of US stimulus battle reflation fears in the US while sluggish activity numbers in China and downbeat manufacturing from Japan probe the market sentiment amid a quiet session during the long weekend in the US and the UK.
Amid these plays, stocks futures are mildly bid but the US dollar index (DXY) trims Friday’s recovery moves, favoring the commodity basket and antipodeans.
Looking forward, off in the key markets may restrict USD/INR moves going forward, even so, headlines concerning India may entertain the intraday sellers.
Technical analysis
A clear downside break of a three-month-old rising trend line, around 72.60, keeps USD/INR sellers directed towards the yearly bottom bear 72.17.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
