USD/INR Price News: Rupee eases above 72.50 as India reports highest covid death toll in 2021

• USD/INR extends the previous day’s recovery moves to refresh intraday top.
• Covid resurgence gains momentum in India, government rejects vaccine shortage claims.
• Risk-off mood favors US dollar strength ahead of Fed’s Powell, US Durable Goods Orders.

USD/INR stays on the bid for the second consecutive day, currently up 0.10% around 72.71, amid the initial Indian session on Wednesday. In doing so, the cross-currency pair not only portrays the US dollar’s strength on the safe-haven buying but also highlights India’s coronavirus (COVID-19) woes.

As per Wednesday’s covid figures, published via Reuters, “India reported 275 new COVID-19 deaths on Wednesday, the most this year, as a second surge in cases fills up hospital beds in big states such as Maharashtra.”

It’s worth mentioning that the virus infections also jump the most since November while adding 47,262 new cases. With this, India becomes the world’s third most covid infected country following the US and Brazil, per Reuters.

While the Indian government is under attack over the latest virus resurgence, the ruling party rather cheers the ample supply of vaccines and stays hopeful to tame the deadly virus soon.

On the other hand, US President Joe Biden also conveyed vaccine optimism but confusion over the future of the fiscal and monetary stimulus, coupled with doubts over economic recovery, weigh on the sentiment. Furthermore, the Sino-American tussles and vaccine rejection in Europe, Hong Kong and Macau, not to forget the extension of virus-led lockdowns in Germany and the Netherlands, also add to the risk-off mood.

Against this backdrop, the US dollar index probes the yearly top while the US 10-year Treasury yield declines to over a week’s low while breaking 1.60% to the south.

Read: Asian Stock Market: Stays pressured as vaccine concerns join China news to sour sentiment

Moving on, India’s trade and current account figures, coupled with the Balance of Payments, can offer immediate direction ahead of the US Durable Goods Order and Fed Chair Jerome Powell’s second appearance during the Congressional testimony.

Technical analysis

A confluence of 21-day and 50-day SMA around 72.82-85 probes the USD/INR pair’s immediate upside.