Rupee trading higher, Lira stabilizes versus Dollar
Tuesday,
14-Aug-2018
12:31 PM (IST)
The Indian rupee is trading higher at 69.81/82 levels (12.10 pm) in the afternoon trade as compared to its opening at 69.85/86 levels after touching a low of 70.08 levels on suspected dollar sales by RBI via state-run banks. However, dollar demand by foreign banks, which is a reflection of high offshore demand and option-related hedging on account of developments in Turkey, is keeping the rupee’s gains under check. Indian bonds are off highs tracking INR's fall to record low of 70.08/USD. Nifty reclaimed 11,400 mark, tracking improvement in Asian equities. As per the technical indicators range for the USDINR pair may be 69.40-70.15 levels. Rupee has an immediate support at 70.00 levels. A breach of the same may see rupee at 70.23 followed by 70.38 levels. On the positive side rupee is likely to face resistance at 69.62 levels and if it is able to break the same then it may gain up to 69.47 levels followed by 69.24 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.33%, 4.29% and 4.25% respectively.
The Turkish lira stabilized while the U.S. dollar slipped on Tuesday as Turkey’s central bank promised to save the country’s financial crisis. Turkey’s central bank announced on Monday a series of measures to offer liquidity and cut reserve requirement for banks, in a bid to saving lira from its crisis driven by the U.S. sanctions and doubled tariffs on silver and aluminum for 50% and 20% respectively. Meanwhile, in UK hard-line Brexiteers are set to force a showdown with Prime Minister Theresa May and her current negotiation strategy with the European Union, and Conservatives are planning on releasing the 'blueprint' for a hard Brexit after vowing to outright reject any proposal from the Chequers. Among other related markets, the Asian equities rebounded, led by the rally in the Japanese stocks. However, the Chinese stocks bucked the trend and slipped amid China slowdown fears. Both crude benchmarks edged slightly higher while gold prices regained $ 1200 levels.
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