Rupee off lows, Lira down vs. safe haven currencies

Monday,   13-Aug-2018   12:22 PM (IST)

The Indian rupee is trading off lows at 69.47/48 levels (12:06 pm) in the afternoon deals after touching the high of 69.41/42 levels due to dollar sales by state-run and private banks, likely for the central bank which helped to limit further losses in the local currency. The rupee touched the low 69.61/62 levels early today in line with similar sell-off across other emerging market risk assets, tracking sharp losses in the Turkish lira. So far rupee traded in the range of 69.41-69.61 levels. Equity benchmarks have continued to trade in the red in afternoon session. The Sensex is down over 220 points, while the Nifty is hovering around 11,350-mark. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 69.20-69.75 levels. Rupee has an immediate support at 69.58 levels. A breach of the same may see rupee falling to 69.69 followed by 69.78 and 69.87 levels. On the positive side, rupee is likely to face resistance at 69.38 levels and if it is able to break the same then it may gain up to 69.29 levels followed by 69.18 and 69.07 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.62%, 4.30% and 4.29% respectively.

FX market kicked-off the new week on a negative note, as risk-off extended into Asia amid further declines in the Turkish currency, the Lira after the nation’s President Erdogan opposed the measures to ease the economic and currency crisis. Most Emerging Market currencies – ZAR, RUB, INR tumbled in sync with the TRY while the Euro and Aussie also extended last Friday’s decline. The EUR/USD pair hit fresh thirteen-month lows near 1.1370 amid fears of Turkey’s contagion on the European banking sector. However, the safe-haven Yen benefited the most, having knocking-off USD/JPY closer towards the 110 handle. As a result, the fear gauge the AUD/JPY cross, was the biggest loser this session, down over 1% to 80.00 levels. Among other related markets, the Asian equity markets extended their declines, led by a sharp sell-off in the Japanese and Chinese stocks. The South African rand and Mexican peso were also weak against the U.S. dollar on Monday as the lira crisis unsettled other emerging market currencies. Meanwhile, both crude benchmarks traded on a cautious footing, as copper futures on Comex slipped below $ 2.73. Gold prices dropped further towards $ 1215, despite the prevalent risk-averse market environment.