USDINR and Global markets – morning update
24th November 2020
INR likely to open around 74.20
The Dollar is slightly weaker, with EUR at 1.1840 and DXY above 92.50. Indian equities gained 0.4% yesterday, with Sensex breaching 44,000. US markets rallied yet another 1%, happy about the AstraZeneca vaccine news and on reports that Janet Yellen could be the next treasury secretary of the US. The infection-related news is being overcome by continuing optimism on vaccines and stimulus hopes.
The global wave of infections continues unabated despite all the lockdowns, though the pace of growth has slowed in the EU, indicating a peak. But, with the bulk of the flu season left in the EU and the US, whether mere lockdowns would prevent an escalation in mortality is a moot question. Indian numbers seem to be again falling as Delhi and Kerala seem to be reaching a plateau. The positive test ratio remains around the 4-4.5% mark and until the ratio falls to below 2%, one cannot conclude that this wave of infection is over in India.
INR could remain range-bound for few more days at least since continuing risk appetite in markets offsets the virus and lockdown concerns. The new range of 74 and 75 seems to be holding well, and there is no trigger apparent, that could move the Rupee out of the range in the next few days.