USDINR Daily Update - 22-Nov

Financial markets continued to react to US, China trade deal updates. US 10 year bond yields spiked nearly 7 bps to 1.77% after the Chinese commerce ministry said Beijing will strive to reach an initial bilateral trade agreement. Consequently, USD/CNH pair corrected to 7.0320 from 7.0530 and USD/JPY rebounded above 108.50. EUR/USD pair corrected nearly 50 pips after broad recovery in US dollar index. Going forward, EUR/USD pair will take further cues from Euro-Zone PMI numbers and ECB president Lagarde’s comments. A dovish tone should lead to further correction in EUR/USD pair.

On domestic front, 10 year bond yield spiked above 6.50% on global cues. Today, RBI to conduct INR 160 Bn bond auction in different long tenure maturities, it might put further pressure on bond yields. USD/INR pair opened the session on a flat note at 71.75. USD/INR pair has support near 71.60-65 levels and resistance at 71.98-72.05 levels. Range for the day 71.60-71.98.