Rupee off intraday low, Dollar lower vs. Yen

Friday,   23-Mar-2018   12:16 PM (IST)

The Indian rupee is trading off intraday low and is currently quoted 65.13/14 levels (12:10 pm) in the afternoon deals after touching the high of 65.1250/1350 levels. Rupee fell to 65.20/21 levels early today as investors sought to exit high-risk investments in favor of safe-haven assets such as the Japanese yen, after the U.S prepared for imposing tariffs on Chinese imports, triggering fears of an escalation in trade war between the world’s two largest economies. However, rupee trimmed the losses likely due to dollar sales by exporters and IPO-related inflows. Nifty is trading below 10,000 and Sensex is down 500 pts amid trade war fear. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 64.95-65.35 levels. Rupee has an immediate support at 65.18 levels. A breach of the same may see rupee falling to 65.25 followed by 65.31 and 65.36 levels. On the positive side, rupee is likely to face resistance at 65.10 levels and if it is able to break the same then it may gain up to 65.03 levels followed by 64.93 and 64.83 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.90%, 4.50% and 4.06% respectively.

The EUR/USD is lifting in a fresh round of Dollar-selling, trading into the 1.2340 level ahead of the European market session. The Euro faltered in Thursday's action following a round of disappointing Markit PMIs for the Euro region. The Japanese currency was a clear winner across the FX space in Asia on the final trading day of this week, as escalating US-China trade tensions heighten the risks of a full-blown global trade war. Amidst market panic and uncertainty, the US dollar was heavily sold-off versus its main competitors, in turn lifting the demand for the Antipodeans. The Asian equities were in a sea of red alongside Treasury yields, with 10-year Treasury yields testing the key support below 2.80%. However, oil prices stood resilient to risk-off flows and climbed 1% amid Saudi Arabian headlines on production cuts.