Rupee higher, USDJPY in range

Thursday,   11-Apr-2019   12:23 PM (IST)

The Indian rupee gains and is currently trading higher at 68.97/98 levels (12:15 pm) in the afternoon deals after touching the high of 68.9450/9550 levels on dollar selling in the market and speculation of corporate inflows. Rupee opened lower today at 69.21/22 levels tracking an overnight jump in crude oil prices. However, minutes of the Federal Reserve’s latest meeting reinforced a dovish outlook, limiting further losses. Dollar inflows in local equities will be watched for further cues. Focus also remains on elections. Local investors will also watch for retail inflation data, due tomorrow. Benchmark indices are trading flat with a negative bias as the metal stocks are weighing them down. At 12:10 PM, the S&P BSE Sensex was trading at 38,546 down 40 points, while the broader Nifty50 was at 11,577, down 8 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 68.80-69.40 levels. Rupee has an immediate support at 69.14 levels. A breach of the same may see rupee at 69.31 followed by 69.40 and 69.50 levels. On the positive side rupee is likely to face resistance at 68.87 levels and if it is able to break the same then it may gain up to 68.78 levels followed by 68.61 and 68.44 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 5.14%, 4.77% and 4.43% respectively.

Forex today breathed a sigh of relief in Thursday’s Asian trading, as the dust settled over the Super Wednesday aftermath that offered no new surprises. The FOMC minutes underscored the Fed’s patience stance while the ECB reiterated that risks to the economy remain skewed to the downside. Meanwhile, on the Brexit front, the EU struck a final accord and offered a flexible Brexit deadline extension until Oct 31st to the UK, leaving doors open for an early exit if the PM May manages to clinch a Brexit deal. The Cable showed little reaction to the Brexit-related developments and circled around the 1.31 handle, as markets look forward to the UK cross-party Brexit talks for fresh directives. The EUR/USD pair also held onto the higher levels below the 1.13 handle amid broad-based USD weakness. Among the Asia-pac currencies, the Aussie extended its correction from 2-month tops and tested the 0.7150 support amid risk-aversion and mixed Chinese inflation data while weaker oil prices kept the bounce in the Loonie and the Kiwi limited.  USD/JPY wavered in a 20-pips tight range around the 111 level amid negative Asian stocks and Treasury yields, as global growth concerns and US-EU trade war risks dented investors’ sentiment.