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Rupee opened higher, China’s Yuan lower vs. Dollar

Tuesday,   14-May-2019   09:04 AM (IST)

The Indian rupee opened the day tad higher at 70.4450/4550 levels compared to its previous close at 70.53/54 levels opens lower amid recovery in Chinese Yuan and most other Asian currencies. Indian government bonds jump with benchmark bond at over one-month high as retail inflation comes below estimates, while core inflation down sharply. Benchmark indices opened flat amid a drop in global markets after escalation in trade tensions between the United States and China on Monday. At 9:34 AM, the S&P BSE Sensex was trading at 37,070, down 21 point, while the broader Nifty50 was at 11,137, down 11 point. As per the technical indicators range for the USDINR pair may be 70.15-70.75 levels. Rupee has an immediate support at 70.55 levels. A breach of the same may see rupee at 70.72 followed by 70.84 levels. On the positive side rupee is likely to face resistance at 70.26 levels and if it is able to break the same then it may gain up to 69.96 levels followed by 69.83 levels.

China's offshore Yuan hit a fresh 2019 low early in Asia on Tuesday and the safe-haven yen remained supported as a fresh escalation in Sino-U.S. trade tensions hit sentiment, with each country raising tariffs on the other's goods. U.S. President Donald Trump said on Monday he would meet with Chinese President Xi Jinping at a G20 summit in Japan late next month. Earlier, China said it would raise tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas, a move that followed Washington's decision last week to hike its own levies on $200 billion in Chinese imports. The U.S. Trade Representative's office also said it planned to hold a public hearing next month on the possibility of imposing duties of up to 25% on a further $300 billion worth of imports from China. On Tuesday, the offshore Yuan weakened to 6.9200 per dollar, its lowest against the greenback since late December. It booked its steepest single-session decline in nine months overnight, giving up nearly 1%. The dollar index against a basket of six rivals was slightly lower at 97.281, having ended the previous session little changed. Against the Japanese yen, the dollar edged up to 109.42 yen, recovering slightly after falling as low as 109.15 yen in early trade. The greenback remained within striking distance of a more than three-month low of 109.02 yen brushed during the previous session, when it shed nearly 0.6%. The Japanese currency tends to benefit during geopolitical or financial stress as Japan is the world's biggest creditor nation. The Australian dollar tacked on 0.2% to $0.6958, having hit its weakest against the greenback since early January overnight. Sterling and the euro both firmed 0.1%, to $1.2968 and $1.1236, respectively. Focus on Tuesday was also on euro zone industrial production for March and Germany's ZEW economic sentiment index for May, both due around 0900 GMT. Bitcoin, the world's best-known crypto currency, hit $8,000 on the Bitstamp exchange for the first time since July last year, before retreating slightly. It was last up 1.4% on the day at $7,919.74.