Rupee inches up, Yuan slips vs. Dollar

Monday,   19-Nov-2018   12:35 PM (IST)

The Indian rupee has inches up to 71.86/87 levels in the afternoon deals on dollar selling in the market. Rupee touched the low of 72.0775/0875 levels early today as investors remained cautious ahead of the central bank’s board meeting today, outweighing impact from broad weakness in the greenback on cautious remarks by the Federal Reserve vice chairman. The benchmark indices are trading higher amid RBI's board meeting which is currently underway. At 12:22 PM, the S&P BSE Sensex was trading at 35,590, up 133 points while the broader Nifty50 was ruling at 10,712, up 29 points. The Reserve Bank of India’s meeting is due today, amid a reported tussle between New Delhi and the RBI over issues including capital and bad loan norms for banks, transfer of RBI surplus to the government and lending to small enterprises. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.65 -72.30 levels. Rupee has an immediate support at 72.01 levels. A breach of the same may see rupee at 72.15 followed by 72.23 and 72.31 levels. On the positive side rupee is likely to face resistance at 71.79 levels and if it is able to break the same then it may gain up to 71.72 levels followed by 71.58 and 71.43 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.22%, 3.94% and 4.12% respectively.

The Yuan slipped while the dollar edged up on Monday as US-China relations soured over the weekend. The USD/CNY pair traded higher to 6.9422. Leaders of the Asia-Pacific Economic Cooperation (APEC) failed to agree on a communiqué for the first time in history, according to reports over the weekend. Papua New Guinea Prime Minister Peter O’Neill, who was chairman of the meeting, said “the two big giants in the room” were the two members of the APEC that could not agree. O’Neill added that Beijing and Washington could not agree on whether “World Trade Organisation and reform of the World Trade Organisation” should be in the Leaders’ Declaration. U.S. President Donald Trump did not join the meeting as Vice President Mike Pence attended instead of him. Richard Clarida, the Federal Reserve’s newly appointed vice chair, expressed caution over the global growth outlook on Friday and said "that's something that is going to be relevant" for the outlook for the U.S. economy. Federal Reserve Bank of Dallas President Robert Kaplan also said in a separate interview with Fox Business that he expected a growth slowdown in Europe and China. Elsewhere, the USD/JPY pair was little changed at 112.75. Japan’s Ministry of Finance showed the country’s exports rose 8.2% in October from the same period last year, compared to the expected 9.0% increase. Official data revealed last week showed Japan’s economy shrank more than expected in the third quarter due to natural disasters and sluggish exports.