USDINR and Global markets – morning update
4th March 2021
USDINR likely to open around 72.80/90
Rupee saw a 65 paise jump and Indian equities had a sharp up-move yesterday as general risk appetite returned to the markets. But, the overall USD strength is still intact, though the Dollar was slow to catch up to the rise in yields yesterday. US 10y is now at 1.48% and if the yields continue to rise today also, one can expect some reversal of yesterday’s Rupee move. US equities, especially NASDAQ continued to fall sharply and today’s futures indicate another slow start to Asian markets. The Dollar is slightly stronger, at 91.05 on the Dollar Index. EUR is at 1.2060 and JPY is above 107.
Yesterday’s Coronavirus numbers in India show a worrying trend, as the new daily infection count has reached close to 17.5k. Markets might not worry about the same yet unless the increased numbers are due to new strains and if vaccines do not keep pace with a potential second wave.
With US yields reversing their fall again, there is a bias towards some INR weakness. Today’s yield behavior would be critical in this regard.