Rupee gains further, USDJPY up

Thursday,   13-Dec-2018   12:20 PM (IST)

The Indian rupee gains further and is currently trading higher at 71.52/53 in the afternoon trade as slower-than-expected expansion in retail inflation and industrial output at 11-month high at home boosted demand for local assets. India’s retail inflation rate eased to 2.3% in November from a year earlier, the slowest pace of expansion since June last year, data released after market hours showed yesterday. So far rupee traded in the range of 71.52-71.70 levels. The benchmark equity indices have trimmed some of their morning gains and are now trading marginally higher amid a rise in the global markets. At 12:11 PM, the S&P BSE Sensex was trading at 35,930, up 150 points, while the broader Nifty50 was ruling at 10,785, up 48 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.30-71.85 levels. Rupee has an immediate support at 71.65 levels. A breach of the same may see rupee at 71.77 followed by 71.83 and 71.90 levels. On the positive side rupee is likely to face resistance at 71.47 levels and if it is able to break the same then it may gain up to 71.40 levels followed by 71.29 and 71.18 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.09%, 3.97% and 4.06% respectively.

The UK PM May’s confidence vote win combined with the increased odds of a US-China trade deal lifted the risk-sentiment across the financial markets in Thursday’s Asian trading. The Asian equity markets continued to benefit from the risk-on market profile alongside higher Treasury yields, both of which powered the USD/JPY pair to re-take the 113.50 barrier. The Antipodeans also cheered the US-China trade deal optimism, with the Aussie having jumped to 0.7230 levels while the NZD/USD pairing remained better bid near 0.6865 region, with the upside capped by downward revisions to the NZ 2018/19 growth numbers. Both the EUR and the GBP traded on the defensive, consolidating yesterday’s bounce and turned cautious ahead of the ECB monetary policy decision. The Swiss franc held steady below 0.9950 heading into the SNB quarterly monetary policy assessment due later in the session ahead.  Meanwhile, gold prices on Comex traded depressed near the 1250 threshold.