- USD/INR drops from seven-week top, snaps five-day winning streak.
- Upbeat headlines/statistics from China manage to trigger risk reset.
- Eyes on the US data, coronavirus headlines for now.
USD/INR pulls back from early-January high to 71.84, -0.29%, as the Indian markets open for Tuesday’s trading. The pair recently declined amid risk reset as odds increased that a cure to China’s coronavirus is available. Also contributing to the pair’s weakness are the latest numbers from mainland China and Hubei.
During the early Asian session, the receding death toll due to coronavirus (COVID-19) in mainland China and Hubei favored the risk reset. The move recently got a boost from the Global Times news that China’s Tianjin University has successfully developed an oral vaccine to counter the COVID-19.
Also supporting the risk recovery could be the headlines suggesting more cases of recovery from Australia and China. Furthermore, the US President Donald Trump’s visit to India is also positively linked to the Indian Rupee’s (INR) strength amid the Indian government’s expectations that achieving a $5 trillion economy by 2024-25 sounds “too idealistic”.
While portraying the trade sentiment, the US 10-year treasury yields recover 1.7 basis points (bps) to 1.394% whereas stocks in Asian also catch a breath after witnessing the sea of red the previous day.
Looking forward, traders will keep eyes on the coronavirus updates for fresh impulse while also waiting for the US data concerning housing markets, manufacturing and consumer confidence. “We expect consumer confidence to maintain its upward momentum in Feb, advancing to 135 from 131.6 in Jan as still-solid labor market fundamentals are likely to continue supporting sentiment. Separately, the consensus is looking for the Richmond Fed manufacturing index to give back some of its recent gains by declining 10pts to 10 in February (published at 10: 00 AM NY). Note that the Richmond index is notoriously volatile and the Jan reading was especially strong: the 20 reading was up from -5 in December,” said TD Securities.
Technical Analysis
Not only a downward sloping trend line from September 2019, at 72.58, but the year 2019 top near 72.63 will also be a tough nut to crack for the buyers if at all they manage to cross Monday’s high of 72.38. That said, the early-month high near 71.65 seems to return to the chart.
Share
