Rupee slips lower, Australian Dollar steady

Wednesday,   18-Oct-2017   12:23 PM (IST)

The Indian rupee slips lower and is currently trading at 65.0750/0850 levels (12:10 pm) in the afternoon deals as banks stepped up greenback purchases for importers and custodian clients in thin trade, offsetting early gains tracking a pause in the dollar’s recent rally.  So far rupee traded in the range of 64.96-65.0750 levels. The benchmark indices extended losses for the second straight day after Axis Bank tanked over 7% to Rs 475 as asset quality of the private lender worsened in the September quarter. As per the technical indicators range for the USDINR pair for the remaining part of the day may be 64.80-65.20 levels. Rupee has an immediate support at 65.09 levels. A breach of the same may see rupee at 65.14 followed by 65.21 and 65.28 levels. On the positive side rupee is likely to face resistance at 64.98 levels and if it is able to break the same then it may gain up to 64.91 levels followed by 64.86 and 64.80 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.35%, 4.13% and 4.22% respectively. Indian financial markets will remain shut tomorrow and Oct.20 for Diwali holidays.

The Australian dollar was steady against its U.S. counterpart on Wednesday, while the New Zealand dollar slipped lower as speculation over the next head of the Federal Reserve continued to lend support to the greenback. AUD/USD was almost unchanged at 0.7847. The greenback remained supported following reports on Monday that U.S. President Donald Trump was favoring Stanford economist John Taylor to replace Federal Reserve Chair Janet Yellen next year. Taylor is seen as more hawkish than current Yellen. Trump is expected to meet with Yellen later in the week as part of his search for a new candidate for her position. Market participants are also keeping an eye on current Fed Governor Jerome Powell and former Fed official Kevin Warsh as potential candidates to succeed Yellen when her term ends in February. The dollar also benefited from data on Tuesday showing that U.S. industrial and manufacturing production rose in line with expectations last month. A separate report showed that U.S. import and export prices jumped higher than expected in September.