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- USD/INR registers three-day losing streak.
- Coronavirus headlines seem to drive the trade sentiment while odds of the US-India trade pact add strength to the Indian rupee (INR).
- News from China, the US Fed will be the keys to watch.
USD/INR extends losses, currently around 71.21, -0.10%, as the Indian markets open for trading on Wednesday. The pair recently takes clues from optimism in Asia while paying a little heed to the strong US dollar.
In addition to receding cases of coronavirus infections in China, the global rating agency Moody’s statements also strengthened the INR. Coronavirus outbreak in China is expected to have a minimal impact on the Indian ports its rates due to low China-related throughput they handle. The share of China-linked container cargo is less than 5 percent by volume for the Indian ports it rates. Additionally, manufacturers will likely seek alternative sources of supply for components to the extent that supply chain disruptions in China persist, said the rating giant on Tuesday.
Further, the US President Donald Trump will also visit Indian during late-February and is expected to sign a trade pact (hopefully). Additionally, news from Reuters, quoting the country’s economic adviser Sanjeev Sanyal, also pleased the pair sellers as it said that Indian economic growth is likely to rebound from more than a six-year low of 4.5% in the July-September quarter.While portraying the same, the US 10-year treasury yields rise nearly three basis points to 1.616% with most Asian stocks also in green by the press time.
Moving on, India’s December month Industrial Output, prior and expected 1.8%, could offer immediate direction with the second day of the Fed Chair Jerome Powell’s testimony and China headlines likely keeping the driver’s seat.
Unless successfully breaking a downward sloping trend line since January 08, at 71.52 now, prices are less likely to avoid visiting 71.00.