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Rupee gains, Pound steady vs. Dollar

Friday,   14-Sep-2018   12:37 PM (IST)

The Indian rupee gains and is currently trading at 71.5875/5975 levels (12:20 PM) in the afternoon deals tracking lower-than-expected retail inflation data at home and in the U.S. India's wholesale price index (WPI) based inflation fell to a 4-month low of 4.53 percent in August 2018 as against 5.09 percent of July 2018, due to a fall in food and non-food prices. The domestic equity market is trading higher on firm rupee and positive global cues. India's Prime Minister Narendra Modi will likely hold a meeting tomorrow evening to take stock of the current macroeconomic situation, a government official said today. The meeting is scheduled to take place after the Indian rupee fell to record lows amid rising crude oil prices, raising concerns over the nation's current account and fiscal deficits widening this year. So far rupee traded in the range of 71.5875-71.86 levels. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.45-72.20 levels. Rupee has an immediate support at 71.77 levels. A breach of the same may see rupee falling to 71.95 followed by 72.03 and 72.12 levels. On the positive side, rupee is likely to face resistance at 71.51 levels and if it is able to break the same then it may gain up to 71.43 levels followed by 71.25 and 71.08 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.43%, 4.56% and 4.44% respectively.

Sterling is trading flat above 1.3110 level boosted by the unexpected slowdown in the US inflation. The Bank of England Governor Mark Varney is scheduled to speak in Dublin just one day after the MPC opted for wait-and-see approach leaving policy unchanged before the Brexit risk is sorted. Euro jumped above 1.1700 to trade at fresh September 20187 high in the aftermath of the US inflation slowdown ahead of the US retail sales report later on Friday. The EUR/USD was boosted by the US inflation missing the market expectations while the ECB confirmed the path of asset purchasing program scale back while leaving growth forecast unchanged but sounded optimistic about prospects for inflation, bolstering the already bullish technical setup. The USD/JPY pair struggled to build on its early uptick beyond the 112.00 handle and consolidated overnight strong gains to 1-1/2 month tops. The Turkish lira eased on Friday, a day after the central bank raised its benchmark rate by 625 basis points in the biggest such increase in President Tayyip Erdogan's 15-year rule. The lira , which has lost more than 40 percent of its value this year, had firmed to as far as 6.08 against the U.S. dollar following the rate hike on Thursday, but later weakened slightly in early Friday trade.