Rupee lower, Dollar edges higher vs. major currencies

Monday,   25-Sep-2017   12:23 PM (IST)

The Indian rupee is trading lower at 64.8650/8750 levels (12:15 pm) in the afternoon trade. It has inches up to 64.73/74 levels in morning deals as expectations of greenback inflows after the central bank tweaked limit for foreign investments in corporate bonds outweighed opening losses stemming from weak shares. However, month-end dollar demand from importers limited further gains, while drop in euro also weighed on the local unit. So far rupee traded in the range of 64.73-64.8650 levels. The benchmark indices extended losses today with the Nifty50 breaching its crucial 9,850 mark as investors turned jittery as they expect government to tinker with its fiscal deficit target for FY18 by announcing an economic stimulus to revive the economy. As per the technical indicators range for the USDINR pair for the remaining part of the day may be 64.65-65.15 levels. Rupee has an immediate support at 64.91 levels. A breach of the same may see rupee at 65.05 followed by 65.14 and 65.23 levels. On the positive side rupee is likely to face resistance at 64.78 levels and if it is able to break the same then it may gain up to 64.69 levels followed by 64.64 and 64.60 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.34%, 4.15% and 4.06% respectively.

The dollar edged higher against other majors currencies on Monday, as markets were recovering from the weekend's elections in Germany and New Zealand, while concerns over tensions between the U.S. and North Korea seemed to subside. Chancellor Angela Merkel won a fourth term in office on Sunday but will have to build a coalition to form a government as Conservatives lost support in the face of a surge by the anti-immigration Alternative for Germany (AfD). GBP/USD added 0.13% to trade at 1.3550, recovering from moderate losses posted on Friday after UK Prime Minister Theresa May gave few new indications on how Brexit will proceed. May proposed a transition period of around two years after the UK leaves the European Union, during which time access to the single market will continue on current terms. Following May's speech, ratings agency Moody's downgraded Britain's credit rating to Aa2, saying government plans to reduce debt had been knocked off course and that Brexit would weigh on the economy.