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Rupee in range, Australian Dollar up

Tuesday,   14-May-2019   01:24 PM (IST)

The Indian rupee slips slightly lower and is currently trading at 70.46/47 levels (12:30 pm) in the afternoon deals after touching the low of 70.51/52 levels on dollar buying in the market. Rupee touched the high of 70.37/38 levels early today after retail prices in the Asian nation increased less-than-expected, prompting bets of an interest rate cut and foreign debt inflows. India’s consumer price index rose by 2.92% in April from a year earlier. However, considering the risk mood in Asia it is very unlikely that rupee will see much upside from here. India's Wholesale Price Index (WPI) slipped to 3.07 percent in April, as against 3.18 percent in March. At 12:12 PM, the S&P BSE Sensex was trading at 37,027 down 64 points, while the broader Nifty50 was at 11,132, down 16 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 70.15-70.75 levels. Rupee has an immediate support at 70.53 levels. A breach of the same may see rupee at 70.65 followed by 70.78 and 70.85 levels. On the positive side rupee is likely to face resistance at 70.42 levels and if it is able to break the same then it may gain up to 70.31 levels followed by 70.22 and 70.13 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.66%, 4.32% and 4.18% respectively.

The sentiment across the fx board received a fresh lift after the US President Trump said that he feels the US-China trade talks will be successful. The resulting risk reset offered a big sigh of relief to the risk currencies such as the Antipodeans and the GBP while the safe-haven Yen slipped across the board. The USD/CNY rally also lost legs at 6.8800 levels. The Kiwi emerged the top gainer amongst the G10 currencies and looked to regain the 0.66 handle. The next in line was the Aussie, as it bounced to 0.6960 despite mixed Australian NAB survey and negative gold prices. The USD/JPY pair also rebounded to 109.70 region, tracking the bounce in the US equity futures and Treasury yields across the curve. Meanwhile, the Loonie traded modestly flat near 1.3470 levels amid a bounce in oil prices and a broadly subdued US dollar. Amongst the European currencies, the EUR/USD pair traded firmer but below the 1.1250 level while the Cable remained unmotivated below the 1.2970 barrier heading into the UK employment data.