USD/INR Price News: Rupee ignores India’s coronavirus woes to renew five-week high
- USD/INR drops for third consecutive day to test the lowest levels since June 28.
- India’s covid infections register biggest daily jump since May 13.
- RBI expected to take back-end measures to infuse liquidity, government up for telecom sector stimulus.
- US ISM Services PMI, ADP Employment Change eyed for intraday moves, risk catalysts are important too.
USD/INR takes offers around 74.16, down 0.08 intraday, to refresh the multi-day low amid early Wednesday. In doing so, the Indian rupee (INR) pair drops for the third day in a row amid broad US dollar weakness.
The US Dollar Index (DXY) declines the most in the week as market players brace for the key data amid stimulus deadlock. Also challenging the greenback are the covid fears as the US Centres for Disease Control and Prevention (CDC) issued a temporary moratorium, expiring on October 03, after noting the heaviest jump in infections in February.
On the other hand, Indian Health Ministry recently conveyed the biggest daily jump in the active covid cases since May 13. The country reports a 42,625 daily rise in coronavirus infections, taking a total to 31.77 million, per Reuters, whereas the death toll grew 562 to 425,757.
It’s worth noting that the recently improving economy from the Asian nation, coupled with the hopes of the Reserve Bank of India’s (RBI) likely qualitative policy moves to tame the inflation, seem to offer a tailwind to the USD/INR. Additionally, the Economic Times came out with news suggesting the country’s planning of stimulus for the telecom sector, which also strengthened the INR.
On a broader scale, market sentiment remains mixed with the stock futures being mildly offered and the US 10-year Treasury yields staying firmer ahead of the busy economic calendar.
Among the key data, an early signal for Friday’s US Nonfarm Payrolls (NFP), namely US ADP Employment Change, will be the key. Also important will be the US ISM Services PMI for July. As both the figures are likely to print positives, offering an additional reason to the Fed hawks, USD/INR may witness a pullback should the US dollar consolidate recent losses.
It should be noted, however, that the RBI meeting on Thursday and Friday’s US NFP becomes crucial events for the USD/INR pair, ahead of which the cautious mood may extend the established downtrend in absence of any surprises.
Technical analysis
A clear break of July’s low directs USD/INR bears towards late June’s bottom surrounding 74.15 but any further weakness will be challenged by June 22 swing lows near 74.05 and the 74.00 threshold. On the contrary, 74.21 and 10-DMA level near 74.36 guard the pair’s short-term recovery moves.