The US dollar is up against the Indian rupee on Friday, aiming for a fourth consecutive day of gains as India gets caught up in regional selling across Asian stock and currency markets in favour of the relative safety of the United States.
USD/INR was higher by 14 pips (+0.20%) to 71.815 with a daily range of 71.66 to 71.858 as of 10am GMT.
USD/INR punched higher but tuned right back down again to tread water mildly higher on the day. The daily gains add to a +0.40% weekly tally.
USD/INR: Indian rupee struck a new one-month low on Friday
INR has reached its weakest level since January 8 amid continuing foreign fund outflows. The spread of the coronavirus outside China to counties including Japan and South Korea have markets worried other Asian nations including India will be next to see infections rise.
The emergence of a ‘superspreader’ in the city of Daegu has seen the number of cases in South Korea spike again with another 52 cases reported as of Friday. The number of cases in South Korea has gone up five-fold in only three days. In China the death toll has risen to 2,118 with 74,576 total cases. There are no known cases of the coronavirus in India but seven of the passengers of the quarantined ship off Japan are Indians.
The US dollar has been gaining across the board as American investors repatriate funds back home and foreign investors flock to the safety of American assets amid the worsening coronavirus outbreak. The dollar index, which tracks the greenback against a basket of currencies is close to reaching a key price milestone. The Dollar Index (DXY) is on the cusp of reaching 100 for the first time since April 2017.
Part of the allure of the dollar has been the dismal economic performance in other developed economies including Germany and Japan. The rising number of coronavirus cases in Japan has caused Tokyo to cancel all large indoor events for next three weeks and the government’s handling of the quarantined cruise ship is coming under heavy criticism.