Rupee trading lower, Yuan falls vs. Dollar

Friday,   15-Feb-2019   12:21 PM (IST)

The Indian rupee is trading lower at 71.32/33 levels (12:11 pm) in the afternoon deals after touching the low of 71.38/39 levels today as appetite for risk assets remain muted, while Brent crude prices jumped above the $65 per barrel mark. However, suspected dollar sales on behalf of the central bank restricted further losses. So far rupee traded in the range of 71.23-71.38 levels. Benchmark indices are trading nearly 1 per cent lower led by a decline in Infosys, HDFC, HDFC Bank and Sun Pharma. At 12:10 PM, the S&P BSE Sensex was trading at 35,554 down 322 points, while the broader Nifty50 was at 10,640, down 106 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.85-71.50 levels. Rupee has an immediate support at 71.35 levels. A breach of the same may see rupee at 71.43 followed by 71.54 and 71.65 levels. On the positive side rupee is likely to face resistance at 71.20 levels and if it is able to break the same then it may gain up to 71.07 levels followed by 70.98 and 70.89 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.38%, 4.34% and 4.15% respectively.

The Yuan fell against the U.S. dollar on Friday in Asia after data showed China’s January Consumer Price Index and Producer Price Index both missed expectations. The country’s CPI rose 1.7% in January from a year earlier, slower than the 1.9% increase in December and below market expectations for a 1.9% rise. Meanwhile, the PPI rose 0.1% year-on-year in January, the weakest pace since September 2016 and slowing from the previous month's 0.9% increase. Generally speaking, a high reading is seen as positive for the Yuan, while a low reading is seen as negative for the Chinese currency. Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was also up 0.1% at 96.893. The rise in the dollar came even after the U.S. Commerce Department reported on Thursday that U.S. retail sales fell for the first time in ten months in December. The market now awaits developments in trade talks between Washington and Beijing. U.S. President Donald Trump's upbeat assessment of the talks earlier in the week raised hopes that the two sides might still be able to reach a deal before the March 1 deadline, but headlines that came out today suggested an agreement might still be some way off. Citing three unnamed U.S. and Chinese officials, Bloomberg reported that the two countries have made little progress so far during their discussions in Beijing this week. They have failed to narrow the gap on issues related to structural reforms to China’s economy, according to the report. Elsewhere, the AUD/USD pair fell 0.2%. Reserve Bank of Australia Governor Christopher Kent said in a speech in Melbourne Friday that he thinks recent weakness in the Aussie dollar might be helpful to the economy.