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Rupee gains, Australian Dollar lower vs. Dollar

Friday,   08-Feb-2019   12:29 PM (IST)

The Indian rupee gains and is currently trading at 71.29/30 levels (12:27 pm) after touching the high of 71.2675/2775 levels tracking a drop in Brent crude prices, even as sentiments remain subdued on renewed worries over U.S.-China trade relations. So far rupee traded in the range of 71.2675-71.4175 levels. The frontline indices are trading over 0.5 per cent lower weighed by a sharp selloff in the automobile stocks and weakness in the Asian markets. At 12:23 PM, the S&P BSE Sensex was trading at 36,751, down 220 points, while the broader Nifty50 was ruling at 11,003, down 67 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 71.00-71.80 levels. Rupee has an immediate support at 71.38 levels. A breach of the same may see rupee at 71.47 followed by 71.53 and 71.64 levels. On the positive side rupee is likely to face resistance at 71.23 levels and if it is able to break the same then it may gain up to 71.17 levels followed by 71.08 and 70.98 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.04%, 4.16% and 4.04% respectively.

The Australian dollar fell against the U.S. dollar on Friday in Asia after the Reserve Bank of Australia (RBA) slashed its GDP growth forecast for the year through June. In its quarterly statement on Monetary Policy today, the central bank cut the GDP growth forecast to 2.5% from the previous 3.25%. For the year to June 2020, the RBA cut its projection to 2.75% from 3.25% and sees 2021 growth at 2.75%. Unemployment is seen at 5.0% through 2019, unchanged from its current level. On inflation, the headline CPI forecast was cut to 1.25%. The AUD/USD pair fell 0.3% to 0.7077 following the news. The Australian currency has now shed 2.4% of its value so far this week. Meanwhile, the U.S. dollar traded near a two-week high, supported by safe-haven demand, after President Donald Trump said this week he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline to achieve a trade deal. White House economic advisor Larry Kudlow warned that there is a "pretty sizable distance to go" before China and the U.S. could reach an agreement, while Treasury Secretary Steven Mnuchin also noted this week that "wide range of issues" remains to be worked out. China and the U.S. have until the start of March to strike a trade deal before additional tariffs on Chinese imports kick in.