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  • USD/INR remains on the back foot after the RBI Governor dims prospects of another rate cut.
  • Trade sentiment remains positive following the promising results of Gilead’s Remdesivir trials.
  • Downbeat Chinese GDP fails to dim optimism in Asia.

USD/INR stretches the pullback from the record top while declining to 76.56 after the RBI Governor skipped another rate cut in his impromptu press appearance on early Friday.

Read: RBI’s Das: Proactive and monitoring the evolving situation very closely

The Reserve Bank of India (RBI) Governor Shaktikanta Das recently addressed media while saying that the RBI is doing everything to fight the epidemiological challenge that the world is facing. In his earlier non-scheduled appearance on March 27, the RBI Governor announced a rate cut of 75 basis points (bps).

Goldman Sachs cut stance on Indian market from ‘overweight’ to ‘market weight’ after the International Monetary Fund (IMF) cited fears of worst Asia-Pacific growth figures, actually a no growth, in 60 years. This might have pushed the Indian PM Narendra Modi to consider announcing the second stimulus.

On the other hand, the US dollar registers broad weakness amid the latest risk-one sentiment. The greenback lost its allure since early Asia when the CNBC broke news about the positive developments concerning the virus cure. The upbeat sentiment then got a boost after US President Donald Trump offered details of his phased economic restart.

As a result, the US 10-year treasury yields bucks the previous declines with nearly six basis points (bps) of gains to 0.67% while stocks in Asia remain positive amid hopes of further stimulus.

It’s worth mentioning that China’s first quarter (Q1) GDP marked sharp contraction in the world’s second-largest economy due to the pandemic. However, better than forecast results of Industrial Production, backed by the previous upbeat figures of PMI and Trade Balance, managed to tame the risk aversion.

USD/INR chart

Unless providing a daily close below a three-week-old rising trend line, currently near 76.20, buyers can’t lose hope to dominate beyond 77.00.