Rupee opened weaker, Dollar higher vs. major currencies

Thursday,   16-Aug-2018   09:06 AM (IST)

The Indian rupee opened the day weaker at 70.19/20 levels compared to its previous close at 69.8950/9050 levels and dropped further to hit record low of 70.3175/3275 levels after India’s trade deficit widens to highest since May 2013. Data released late Tuesday shows India trade deficit rose to $18.02 billion in July. Concerns about Turkey’s economic woes spreading to other emerging markets also persisted. The benchmark indices opened lower tracking the fall in rupee. At 9:15 AM, the S&P BSE Sensex was trading at 37,657, down 194 points while the broader Nifty50 was ruling at 11,379, down 56 points. Indian government bonds fall, with benchmark note hitting lowest in two weeks, as rupee continues falling against dollar to another record, leading to fears of foreign fund outflows. As per the technical indicators range for the USDINR pair may be 69.70-70.40 levels. Rupee has an immediate support at 70.36 levels. A breach of the same may see rupee at 70.45 followed by 70.65 levels. On the positive side rupee is likely to face resistance at 70.00 levels and if it is able to break the same then it may gain up to 69.85 levels followed by 69.57 levels.

The dollar held near a 13-month peak on Thursday as political turmoil in Turkey and concerns about China's economic health continued to support safe-haven assets and weighed on emerging market currencies. The dollar index against a basket of six major currencies stood at 96.49 after rising to a 13-month high of 96.984 the previous day. The greenback drew strength after a tough week for emerging market currencies, initially led by the rout in the Turkish lira. The currency plunged to an all-time low at the start of the week as tensions between Ankara and Washington flared and worries increased about President Tayyip Erdogan's economic stance. The lira has since recovered to 6.00 per dollar after slumping to a record low of 7.24 on Monday. However, the rebound did little to lift its emerging market counterparts, with the Indian rupee stuck near a record low, the South African rand shedding more than 2 percent overnight and the Chinese Yuan at its weakest in 15 months after a raft of data pointed to a slowing economy. Recent weakness in Chinese assets has helped fan risk aversion in the broader markets and investors waited to see whether Beijing would draw a "line in the sand" to arrest the yuan's fall. Concerns that European banks would be negatively affected by financial turmoil in Turkey have weighed on the single currency. The yen, another perceived safe-haven along with the dollar, remained on a bullish footing.