USD/INR rebounds above 74 on broad USD strength

• US Dollar Index gains traction on stimulus hopes.
• 10-year US Treasury bond yield erases early losses.
• India suspends all tourist visas until April 15th.

The USD/INR pair rose above the 74 handle during the first half of the day but struggled to stretch higher as the USD failed to find demand on growing investor scepticism over the Trump administration's economic stimulus package. 

USD rebounds in American session

After sliding to 73.50 area, however, the pair gained traction and, once again, rose above the 74 mark. US Treasury Secretary Mnuchin said that they were planning to delay the tax deadline as part of the coronavirus economic response package to put $200 billion into the economy.

Reports suggest that the economic relief package is expected to be announced on Wednesday and put to a House vote on Thursday. Boosted by these headlines, the 10-year US Treasury bond yield erased its daily losses and rose as much as 5% before turning flat on the day. The US Dollar Index capitalized on recovering US T-bond yields and rose to 96.50 area to lift the pair higher.

On the other hand, the Indian government in a statement announced that it has suspended all tourist visas from March 13th until April 15th to prevent the spread of the coronavirus to weigh on the INR.

Technical levels to watch for