Rupee traded lower, Pound little changed Vs Dollar

Wednesday,   17-Oct-2018   12:32 PM (IST)

The Indian rupee gave up early gains against the dollar in afternoon trade and is currently trading at 73.47/48 levels (12:15 pm). Rupee opened at 73.41/42 levels today and moved lower to 73.56/57, before regaining some strength as dollar purchases by crude oil and other importers offset gains triggered by upbeat global risk appetite. Foreign investors bought $558.89 million of Indian government and corporate bonds yesterday, their biggest purchase since Oct. 3, 2017, according to NewsRise calculations based on data from Clearing Corp of India Ltd. and National Securities Depository Ltd. Indian benchmark indices opened close to 1% positive on Wednesday, before paring gains, as liquidity concerns dragged down non-banking financial stocks. As per the technical indicators range for the USDINR pair may be 73.00- 73.70 levels. Rupee has an immediate support at 73.55 levels. A breach of the same may see rupee at 73.68 followed by 74.06 levels. On the positive side rupee is likely to face resistance at 73.19 levels and if it is able to break the same then it may gain up to 73.03 levels followed by 72.85 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.59%, 4.45% and 4.36% respectively.

GBP is trading little changed on the downside at around 1.3180 ahead of UK inflation data that are expected to see headline inflation pick up while core inflation is set to decelerate. The market reacted to comments from Germany's Europe Minister Roth, who said that they are close to a Brexit deal, but adding that they shouldn't rule out the chance of a no-deal. Irish PM Varadkar also made it to the wires, saying that there will be no withdrawal agreement without a legally binding backstop, while EU's Chief Negotiator Barnier later said that the Irish border issue remains unsolved and that they may need more time to reach an agreement. The key risk event is the Brexit summit in Brussels that is unlikely to deliver the final agreement with hopes for the deal in November. Also, in focus remains the Eurozone final CPI data alongside the release of the construction output. The US docket also remains quite eventful, with the US housing starts and building permits data slated for release ahead of the speeches by the ECB Vice-President Weidmann and FOMC member Brainard. However, the main highlight in the NA session remains the FOMC minutes due at 1800 GMT.