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Rupee flat, USDJPY up

Monday,   10-Jun-2019   12:20 PM (IST)

The Indian rupee is trading flat at 69.45/46 levels (12:02 pm) in the afternoon deals as bets over Federal Reserve rate cuts were re-affirmed following a disappointing U.S. jobs report. A further rebound in crude oil and losses on most Asian currencies kept the rupee’s advance in check. So far rupee traded in the range of 69.3975-69.4725 levels. At 12:08 PM, the S&P BSE Sensex was trading at 39,704 up 88 points, while the broader Nifty50 was at 11,904, up 33 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 69.15-69.65 levels. Rupee has an immediate support at 69.48 levels. A breach of the same may see rupee at 69.56 followed by 69.64 and 69.73 levels. On the positive side rupee is likely to face resistance at 69.40 levels and if it is able to break the same then it may gain up to 69.33 levels followed by 69.27 and 69.20 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 3.82%, 3.97% and 4.04% respectively.

The Asian traders cheered the US-Mexico trade progress and increased bets of a Fed rate cut at the start of a brand-new holiday-thinned week, as reflected by the risk-on rally in the Asian equities. However, the optimism soon faded somewhat after the Chinese trade data showed the country’s imports slumped the most in nearly three months, leading to a bigger-than-expected expansion in the trade surplus. The poor data re-ignited the China slowdown fears and weighed on the domestic currency and the Chinese proxies, the Antipodeans. The Kiwi was the biggest loser and fell back below the 0.6650 barrier while the Aussie lost nearly 0.40% to test the 0.6970 level. Meanwhile, the USD/CNY pair hit fresh yearly tops of 6.9358. The USD/JPY pair was boosted by better risk sentiment and flirted with daily tops near 108.60 region, having witnessed a bullish opening gap on positive trade news. On the other hand, both the European currency pairs, EUR/USD and Cable traded on the back foot amid a broad-based US dollar recovery Amongst the commodities, both crude benchmarks advanced on Saudi’s bullish view on the output cut policy while gold futures on Comex fell back towards 1330 levels amid higher equities and Treasury yields.