Rupee opened higher, Pound holding gains vs. Dollar

Thursday,   13-Dec-2018   09:08 AM (IST)

The Indian rupee opened the day higher at 71.70/71 levels compared to its previous close at 72.01/02 levels as global trade tensions eased and after India consumer prices rise at slowest pace in almost one-and-half years. Mirroring global market peers, the domestic equity market opened on a positive note today. The S&P BSE Sensex gained over 200 points in the opening deals to reclaim the crucial 36,000 level while the Nifty50 index of National Stock Exchange (NSE) was trading above 10,800 levels, up 70 points. Indian government bond prices higher in early trade as headline retail inflation slipping to 17-month low of 2.33% on year in November raises speculation of change in monetary policy stance in February, followed by a rate cut in months ahead. As per the technical indicators range for the USDINR pair may be 71.30-71.85 levels. Rupee has an immediate support at 71.85 levels. A breach of the same may see rupee at 72.01 followed by 72.27 levels. On the positive side rupee is likely to face resistance at 71.52 levels and if it is able to break the same then it may gain up to 71.36 levels followed by 71.11 levels.

The pound largely held onto overnight gains on Thursday after British Prime Minister Theresa May pulled through a no-confidence vote on her leadership that bought her more time to try to sell her unpopular Brexit deal to a deeply divided parliament. The euro edged higher against the dollar after Italy lowered its deficit target for next year and said it expected the European Commission to accept its new 2019 budget proposal. The dollar index, which measures the greenback against six major rivals, was steady at 97.032. It had fallen from a near one-month high overnight, losing almost half a percent, its steepest drop in two weeks. In a secret ballot, May won the support from 200 of 317 Conservative lawmakers. Any respite for the pound was expected to be short-lived, however, as a mutiny by more than a third of her lawmakers signaled she was no nearer to passing her plan to leave the European Union. Sterling held steady at $1.2627 in early trade on Thursday. It had bounced off a 20-month low of $1.2477 during the previous session, ending 1.1 percent higher on the day in the aftermath of the vote. With Britain due to leave the EU on March 29, parliament's opposition has suddenly opened up possibilities including a potentially disorderly exit with no deal or even another referendum on membership.