Globally, PBoC
has cut key interest rates (1 year by 10 bps and 5 year by 5 bps) to lend
support to Chinese economy, which has been hit by an outbreak of Corona Virus. It
is noteworthy that PBoC has been proactive in monetary easing, earlier it has done
significant liquidity injections. Chinese yuan reacted adversely as USD/CNH
spiked two month high of 7.04 handle. On other hand, US FED minutes showed that
FED is likely to keep interest rates unchanged in near term. FED members were
broadly optimistic about US economic activity. Consequently, US Dollar surged
to fresh 33 months high of 99.71 levels.
On domestic front, USD/INR pair witnessed a gap up opening at 71.74 levels against previous close of 71.54. Interestingly, Rupee witnessed a gradual recovery tracking movement in Chinese yuan, which recovered to 7.025 from intraday high of 7.0405 levels. USDINR pair is currently trading at 71.56-57. The USDINR pair has immediate support at 71.54-55, first resistance at 71.70 levels and second resistance at 71.92 levels.
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