Rupee range bound, GBP/USD extend the corrective slide
Wednesday,
23-Jan-2019
12:27 PM (IST)
The Indian rupee is trading range bound and is currently quoted 71.19/20 levels (12:20 pm) in the afternoon deals in line with most Asian currencies amid an overnight drop in crude oil prices. Decline in crude prices has supported the rupee; still the upside is capped by weak risk sentiment and persistent dollar demand from importers for month-end payments. So far rupee traded in the range of 71.15 to 71.27 levels. Sensex continues to trade flat, while Nifty trading above 10,900 levels. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.90-71.60 levels. Rupee has an immediate support at 71.25 levels. A breach of the same may see rupee at 71.32 followed by 71.37 and 71.42 levels. On the positive side rupee is likely to face resistance at 71.13 levels and if it is able to break the same then it may gain up to 71.08 levels followed by 71.01 and 70.94 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.11%, 4.14% and 4.06% respectively.
The GBP/USD pair is seen breaking lower from its overnight consolidative range heading into the early European trading, as broad-based US dollar recovery gathers steam amid better risk tones. The Pound grabbed strength from the UK employment report which showed that the labor market remained robust, with the ILO Unemployment rate falling to 4.0% in the three months to November, while over the same period, wages' growth was stronger-than-expected, up by 3.4% largely outpacing inflation. In the Brexit front, opposition leader Jeremy Corbyn tabled an amendment calling for a series of indicative votes on ways to resolve Brexit stalemate, including the possibility of a second referendum. Hopes that, despite the current chaos, a hard-Brexit will be avoided are the main reason for Pound's strength. The UK calendar will be lighter this Wednesday, as the only figure scheduled is the CBI Industrial Trends Survey on Orders for January. In commodity front, U.S. West Texas Intermediate (WTI) crude futures managed to crawl up 0.17 percent to $53.1 per barrel after shedding 1.9 percent the previous day.
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