Rupee opens weak, Sterling higher Vs dollar

Thursday,   14-Mar-2019   09:15 AM (IST)

The Indian rupee opened lower at 69.67/68 levels compared to its previous close at 69.5350/5450 levels, but quickly recovered after RBI says it will inject long-term rupee liquidity via USD/INR 3-year swaps. Benchmark equity indices are trading positive. Indian government bonds recovered from early-session fall on RBI’s move to infuse rupee liquidity for longer duration via long-term foreign exchange buy/sell swap. However, benchmark 7.17% 2028 note fell to a two-week low as it may hurt hopes of more open market note purchases going ahead. As per the technical indicators range for the USDINR pair may be 69.30-69.90 levels. Rupee has an immediate support at 69.78 levels. A breach of the same may see rupee at 69.96 followed by 70.14 levels. On the positive side rupee is likely to face resistance at 69.42 levels and if it is able to break the same then it may gain up to 69.24 levels followed by 69.06 levels.

Sterling remained higher against the dollar after a series of Brexit-related votes in UK’s Parliament crossed the wires. On Wednesday, and by a thin margin of 4 votes, MPs rejected a ‘no-deal’ Brexit by favoring the ‘Spelman Amendment’. A subsequent vote to block a ‘no-deal’ by trying to take it permanently off the table then passed 321 to 278. After Theresa May’s revised Brexit deal was rejected yesterday, increasing the odds of a ‘no-deal’ divorce, today’s round of voting seemed to be interpreted by the markets as decreasing the chances of the UK crashing out of the EU without any deal. Not surprisingly, the British Pound was the best-performing major currency by an overwhelming majority. Crude oil prices rallied the most in almost a month, leading the commodity to close at its highest since November. An uptick in market mood lifted sentiment-linked oil as better-than-expected US durable goods orders helped the S&P 500 trim its losses from last week. Crude oil also got a boost thanks to a drawdown in official weekly stockpiles reported by the US Energy Department.