- USD/INR accelerates the recovery moves from 75.47.
- RBI announces 40 basis points (bps) of cuts in the key Repo and Reverse repo rates.
- Downbeat comments from China’s National People’s Congress (NPC) weigh on trading sentiment.
USD/INR stays bid around 75.72, up 0.11% on a day, after the Reserve Bank of India (RBI) announced rate cuts on early Friday.
Read: RBI unexpectedly cuts key rate by 40bps to 4.0% in May
While the initial reaction to the RBI’s rate cuts seems limited, the pair seems to gain influence from the expected escalation in the US-China tussle due to the latest developments in China.
The dragon nation is inching closer to tightening its grip over Hong Kong. While the Asian major haven’t directly targeted the US yet, the US Senate Majority Leader McConnell earlier said that further China crackdown on Hong Kong will intensify the interest in re-examining the US-China relationship.
That said, the 13th NPC also dropped its GDP targeting for 2020 and triggered wide fears based on the coronavirus (COVID-19) woes.
Technical analysis
Buyers are looking for a clear break of the monthly resistance line, at 75.75 now, to aim for 76.00 and May 12 high surrounding 76.20. Alternatively, sellers await entries below 75.45 to target 75.00.
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