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Rupee lower, Euro higher vs. Dollar

Friday,   12-Apr-2019   12:24 PM (IST)

The Indian rupee dropped to 69.29/30 levels (12:15 pm) in the afternoon deals after touching the low of 69.37/38 levels as banks cut short dollar positions following media reports that India's Supreme Court has ordered status quo in Essar Steel insolvency case, halting ArcelorMittal's payment of INR420 billion ($6.06 billion). Rupee opened lower today after weekly U.S. jobless claims dropped to a 50-year low, while producer prices in the world’s largest economy increased more than expected, lifting demand for the dollar. So far rupee traded in the range of 69.03-69.37 levels. Local markets await retain inflation data at home due later today. Focus also remains on India’s general elections that began yesterday, and voting will be held in several phases through May. Benchmark indices slip into red and Nifty is trading below 11,600. At 12:12 PM, the S&P BSE Sensex was trading at 38,584 down 23 points, while the broader Nifty50 was at 11,588, down 9 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 68.80-69.50 levels. Rupee has an immediate support at 69.43 levels. A breach of the same may see rupee at 69.57 followed by 69.77 and 69.97 levels. On the positive side rupee is likely to face resistance at 69.08 levels and if it is able to break the same then it may gain up to 68.89 levels followed by 68.75 and 68.60 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 5.41%, 4.85% and 4.55% respectively.

The euro rose to a 2-1/2-week high on Friday, as dealers said speculators anticipated increased demand for the common currency arising from a Japanese bank's plans to purchase the multi-billion dollar aviation finance business from a German bank. The euro rose 0.35 percent to $1.1289 after touching $1.1294, its highest since March 26. The common currency also advanced about 0.4 percent to 126.23 yen, its strongest since March 21. Dealers said speculators were buying the euro in response to reports on Mitsubishi UFJ Financial Group's planned purchase of the aviation financing business of Germany's DZ Bank. As of June last year, that business stood at 5.6 billion euros. Pressured by the stronger euro, the dollar index against a basket of six major currencies was down 0.2 percent at 96.991, giving up most of the previous day's gains. This week both France and Italy reported higher than expected industrial output in February, offering positive signs for the bloc after some downbeat data. The dollar was little changed at 111.77 yen after gaining 0.6 percent overnight on robust U.S. data and the subsequent rise in U.S. Treasury yields. Data released on Thursday showed first-time filings for U.S. jobless benefits dropped to a 49-1/2-year low last week, pointing to sustained labor market strength. Overall producer prices increased 0.6 percent in March, the largest rise since October. The greenback's advance, however, stalled ahead of the 112.00 yen threshold. The dollar had sagged on Wednesday after a mixed report on domestic consumer prices reinforced the notion that underlying U.S. inflation remains tame. Volatility for sterling plunged after a midweek deal at an emergency European Union summit to postpone Britain's exit from the bloc to Oct. 31. The deal meant Britain would not crash out this week without a treaty.