Indian Rupee stumbles against the greenback amid new US — China trade deal barrier. On the interbank market, the USD/INR exchange rate settled 4 paise lower at 71.59 (New York-based closing price), on Thursday.
During the early Asia trading hours and after the London open, Rupee was seen quote slightly higher around 71.69 against the US dollar.
The center of attention on global markets remains the US — China trade negotiations, which continue to impact emerging market currencies. The Fed announcement of taking a pause in its easing efforts has only moderately helped the INR exchange rate.
Following the PBOC rate cut, the INR rate couldn’t benefit from more easing measures coming from the world’s second biggest economy in the world. Indian Rupee is reluctant to make a decisive break as investors are waiting for more cues from the US — China trade deal developments.
The domestic benchmark equity index NIFTY 50 closed down on Thursday, settling at 11968 registering a -0.47% loss. However, during early Asia trading hours, NIFTY 50 was seen quoted further down at 11884. The Indian 10-year government bond yield closed at 6.49 versus the 6.51 previous closing prices.
The dollar index, which gauges the greenback’s strength against a basket of major currencies, closed moderately higher on Thursday settling at 97.96 or 0.1% gain.
China dismissed recent rumors about the phase-one trade deal between the US and China as not accurate. However, the trade tensions between the world’s two largest economies have reached a new barrier following the US Hong Kong bill voted by the US Congress.
The Chinese government is expected to retaliate if the US President Donald Trump signs the Congress bill into law. With less than 6 weeks left until the end of 2019 the probabilities of a trade deal signed by year end are slim.
USD/INR Technical Pattern
On the technical front, the USD/INR exchange rate over the past three days has established key support at the 71.44 level. On the upside, currency traders are still eyeing the 2019 high established at the 72.42 level on 3 September.