USD/INR refreshes multi-day top as coronavirus fears portray risk-off in Asia
- USD/INR ignores Friday’s Doji while extending the previous run-up.
- China’s coronavirus seems to infect more than 30,000 people, also cross the national boundaries.
- IMF’s Chief anticipates Indian growth slowdown as temporary, India plans to hike import duties on Chinese items.
USD/INR retraces early-day gains to 71.42 during the pre-European session on Monday. That said, the pair rose to 71.63, fresh highs since January 08 during the Asian session as traders rushed to the US dollar while seeking safety from China’s coronavirus contagion.
Also fueling the pair are the market’s concerns that the Indian government’s upcoming budget must include measures to propel domestic demand. Bibek Debroy, the chairman of PM's Economic Advisory Council anticipates the country’s growth to be near 5.0% excluding the inflation rate.
Even so, IMF chief Kristalina Georgieva said, on Friday, that growth slowdown in India appears to be temporary and she expects the momentum to improve going ahead, as reported by Money Control.
News also crossed wires that the Indian government is planning to raise import duties on more than 50 Chinese items worth $56 billion.
With this, traders’ risk aversion gets additional support and propels the traditional safe-havens like the US dollar and Japanese yen while stepping back from stocks. Also portraying the risk-off are the US 10-year treasury yields that dropped to a multi-week low of 1.63% whereas S&P 500 Futures also slumped 1.0% before settling to 3,262 by the press time.
Read: US stock futures drop 1% on Coronavirus scare
Holidays in most Asian regions and nearness to the Indian budget, coupled with China’s coronavirus outbreak, could keep the risk catalysts as the key drivers.
Technical Analysis
Should prices close below 100-day SMA level of 71.29, sellers will wait for the downside break of 71.00 to aim for 200-day SMA near 70.67. Otherwise, buyers can keep 72.15, comprising resistance line stretched from September 2019, as a short-term target.