- USD/INR holds on to recovery gain as the greenback pauses two-day-old declines.
- Doubts over the future US-China trade relations, pessimism surrounding Asia-Pacific economies added weakness into the INR.
USD/INR trades near 70.95 as the Indian markets open for trading on Tuesday. The pair carries the three-day-old recovery amid fresh concerns surrounding the US-China trade relations and the Reserve Bank of India’s (RBI) dovish stand.
The phase-one deal between the United States (US) and China is up for various alterations and the final reading will also need multiple agreements. The same disappoints Chinese businesses and former policymakers as per the South China Morning Post (SCMP).
Also contributing to the market’s pessimism are the comments from the Moody’s and Fitch that raise doubts on the Asia-Pacific economies.
Dovish comments from the RBI Governor and MPC Chair Shaktikanta Das weighed on the pair the previous day. On the contrary, the St. Louis Federal Reserve (Fed) Bank President James Bullard preferred waiting before taking sides on the Fed’s next move.
Market’s risk tone turned mixed with the US 10-year treasury yields’ declines and Asian stocks’ rise.
Traders will prefer waiting for more clues on the US-China trade relations and the US data for further rise.
Technical Analysis
A daily closing beyond late-November lows, near 71.23, becomes necessary to extend the latest run-up unless then fears of 70.35/30 returning to charts are high.
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