The inter-bank remains closed on Wednesday as Mumbai is closed for Chatrapati Jayanti. However, the USD/INR declines to 71.52 as the Indian markets open for trading on Wednesday. The pair’s latest surge to 71.83 repeated the habit of being short-lived amid risk reset in Asia. However, broad challenges to the Indian economy remain standby.

With the World Health Organization’s (WHO) urge to keep calm over China’s coronavirus death toll, which crossed 2,000 mark as of February 20, joined optimism spread by Chinese President Xi Jinping. The diplomat ruled out Moody’s downbeat growth forecast while expecting the GDP growth to meet the mark in 2020 despite coronavirus threats.Also on the positive side could be US President Donald Trump’s comments saying, “We will have a really big trade deal with India, maybe after November US election.” Even so, Moody’s raises doubts on the Asian credit conditions while also downgrading Indian growth forecasts to 5.4% versus 6.6% prior. Furthermore, data from the Central Statistical Organisation shows that the Indian gross savings slump 30.1%, the lowest since 2003/04.While portraying the market sentiment, the US 10-year treasury yields stay mildly positive to 1.566% with the risk recovery in Asia. It’s worth mentioning that risk reversals suggest the options market is most bullish on the USD/INR pair in over four months. Given the absence of major data/events at home, traders will keep eyes on the headlines from China as well as the US statistics for near-term direction.