Rupee steady, USDJPY up

Friday,   07-Dec-2018   12:26 PM (IST)

The Indian rupee is trading in range and is currently quoted 70.55/56 levels (12:22 pm) in the afternoon deals after touching the high of 70.4525/4625 levels early today after the Brent crude oil price dropped back below $60/barrel ahead of the output cut decision by oil exporting group OPEC and allies. So far rupee traded in the range of 70.4525-70.61 levels. The benchmark indices are trading around 0.5 per cent higher taking cues from their Asian peers. At 12:15 pm, the S&P BSE Sensex was trading at 35,444, up 132 points while the broader Nifty50 was ruling at 10,623, up 22 point. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.25-70.75 levels. Rupee has an immediate support at 70.60 levels. A breach of the same may see rupee at 70.69 followed by 70.76 and 70.84 levels. On the positive side rupee is likely to face resistance at 70.45 levels and if it is able to break the same then it may gain up to 70.37 levels followed by 70.29 and 70.20 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.95%, 3.89% and 4.04% respectively.

GBP/USD continues to trade with softer tones in the Asian market window as investor sentiment remains apprehensive leading into Friday's London opening bell. Forex today saw mild risk-on action with Chinese Yuan pushing higher against the greenback and JPY crosses picking up a bid, tracking mild gains in the Asian equities. The Dow Jones Industrial Average (DJIA) which was down more than 700 points at one point Thursday, staged a V-shaped recovery after the Wall Street Journal (WSJ) reported that the Fed is considering whether to signal a new wait-and-see mentality at their December meeting. The late recovery in the US stocks likely put a bid under the Asian equities. Major names like Japan's Nikkei, Shanghai Composite, South Korea's Kospi reported moderate gains. As a result, JPY crosses regained poise. The risk assets may have also received a boost from Trump's tweet, which China's comments on their commitment to achieving a trade deal. Meanwhile, the USD/JPY extended its overnight rebound from the all-important 100-day MA support to levels just below 113.00. BOJ's Kuroda ruled out additional stimulus, but at the same time squashed hopes of near-term taper. Looking forward, the risk assets may cheer Trump's tweet and reports stating that Fed officials are considering signaling a wait-and-see approach on rate hikes next year. As a result, the US dollar may remain on the defensive and JPY crosses better bid ahead of the US non-farm payrolls and wage growth release.