USD/INR steps back from record top to 76.00 as Asian markets cheer risk reset
- USD/INR fails to sustain the record high near 77.85.
- Increased odds about the soonest release of US COVID-19 Bill pleased the risk-takers.
- Indian equity benchmarks are up near 5.0% despite concerns relating to coronavirus lockdown and its economic impact.
With the rising expectations from the US COVID-19 Bill fueling trade sentiment in Asia, USD/INR steps back from the record top to 76.05, down 0.64% with intraday low of 76.01, amid the initial Indian trading session on Tuesday.
Although the US Senate members failed to agree over the Republican-backed package to combat the deadly virus, recent headlines suggest the policymakers are close to the deal that can be rolled out soon.
While identifying this, coupled with the Fed’s unlimited QE and earlier rate cuts, risk-tone recovers. To portray this, the US 10-year treasury yields rise nearly five basis points (bps) to 0.82% while the Indian stock benchmarks register 5% gains amid the initial few minutes of trading.
Even so, Reuters cites fears for some of India’s poor residents after the government announced multiple lockdowns and suspended domestic flights to tame the spread of the deadly virus. By Monday, there have been 471 cases with seven deaths due to the disease in the Asian nation.
It’s worth mentioning that the Reserve Bank of India (RBI) announced on Monday that it preponed the second tranche of purchasing Indian rupee 15,000 crores of government securities under the open market operations (OMOs) that was earlier scheduled for March 26.
Moving on, traders will now pay close attention to the US package and COVID-19 headlines while also following the preliminary readings of the PMI for intermediate clues.
While March 13 high near 75.65 is likely immediate support for the pair, buyers are less likely to enter unless the pair successfully clears 78.00 mark.