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  • USD/INR remains on the front foot despite staying below Tuesday’s multi-year high.
  • Renewed fears of coronavirus outbreak weighing on the Asian stocks.
  • A widespread outbreak in the US, Japan and worries from Europe keep risk-tone heavy.

Having reversed from three-decade low on Tuesday, USD/INR registers 0.50% gains to 73.90 as the Indian markets open for trading after the holiday on Wednesday. While the US dollar seems to trim some of its earlier gains against major counterparts, Asian currencies, including the Indian rupee, have to respect the King Dollar as stocks in the Asia-Pacific region register losses.

With the private numbers about the US coronavirus (COVID-19) cases from the John Hopkins University raising fears of a widespread outbreak of the pandemic, risk-tone gets another hit. The trading sentiment failed to extend the previous day’s recovery after the US diplomats refrained from providing details of US President Trump’s ‘major’ economic response to the disease as well as doubts that the US labs face resource issues.

Further weighing on the risk-tone is the news of the spike in Japan’s virus numbers as well as the Global Times headlines that warn the US diplomats’ downplay or the pandemic’s risk.

That said, the US 10-year treasury yields slip to 0.67% whereas MSCI’s Index of Asia-Pacific shares outside Japan registers 0.15% loss with Indian bourses inching closer to 1.0% in the red.

At home, Moody’s have already slashed the Indian GDP forecast while downbeat comments from the United Nations Conference on Trade and Development (UNCTAD) weigh on the Indian currency.

Looking forward, US inflation numbers and coronavirus headlines could work as the key near-term catalysts.

Technical Analysis

While buyers will seek sustained trading beyond 74.50 to target a move above 75.00, bears can look for entry below 73.20.

 

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