USD/INR slips from two-week top to 71.20 as Indian markets recover early-day losses
- USD/INR fails to hold onto recovery gains amid upbeat performance by Indian equities.
- Risks from the outbreak of China’s coronavirus, US President Donald Trump’s impeachment hearing join hands with the IMF’s forecast of sluggish GDP growth.
- Upbeat results, expectations of government measures and market’s open on the budget day grabbed market attention off-late.
USD/INR declines to 71.20 ahead of the European session on Wednesday. That said, the pair pulls back from a two-week high of 71.44, flashed early-day, amid the recovery in the Indian equities. The quote seems to ignore pessimism surrounding China and the US while also ignoring recent warnings from the International Monetary Fund (IMF).
Indian markets opened slightly under pressure due to the outbreak of coronavirus and Chinese efforts to tame the same. However, upbeat performance results by the domestic companies and Singapore Nifty help the headline BSE SENSEX to mark 0.20% gains to 41,400 by the press time.
Traders might also have cheered the exchange board’s decision to let the performance continue on February 01, Saturday when the Indian government will announce its annual budget. This will be the first time that such things have happened. The reason could be traced back to the IMF warning of worrisome GDP growth and news of declining investment into the Asian nation.
In the US, President Donald Trump’s impeachment hearing began with the Republicans' victory to block Democratic push for the subpoena of state department documents. Further, clues from China suggest that Beijing is less inclined to begin the phase-two deal talks, not to mention less excited after the phase-one signing in, compared to the US.
Markets are likely to take clues from the US data as well as updates from the risk catalysts like Chinese virus and trade headlines to determine near-term moves of the pair.
Technical Analysis
A confluence of 21, 50 and 100-day SMA around 71.24/31 seems to restrict the pair’s immediate upside, which in turn drags the quote towards January 14 low near 70.60.