Rupee inches lower, USDJPY holding ground

Friday,   14-Jun-2019   12:20 PM (IST)

The Indian rupee inches lower and is currently trading at 69.55/56 levels (12:18 pm) in the afternoon deals after touching the low of 69.5950/6050 levels after crude oil extended yesterday’s advance amid mounting U.S.-Iran tensions. So far rupee traded in the range of 69.51-69.5950 levels. Demand from importers is likely considering the risks posed by oil. Moreover, regional risk appetite is quite unexciting, providing interbank with another reason to buy the dollar. Traders awaited the release of U.S. retail sales figures and China activity data to assess how the two economies are holding up in the face of their prolonged trade conflict. May WPI Inflation is at 2.45 % y/y compared to April WPI at 3.07% y/y. At 12:09 PM, the S&P BSE Sensex was trading at 39,538 down 204 points, while the broader Nifty50 was at 11,842, down 73 points. As per the technical indicators, range for USDINR pair for the remaining part of the day may be 69.30-69.85 levels. Rupee has an immediate support at 69.58 levels. A breach of the same may see rupee at 69.66 followed by 69.72 and 69.78 levels. On the positive side rupee is likely to face resistance at 69.50 levels and if it is able to break the same then it may gain up to 69.43 levels followed by 69.34 and 69.25 levels. In the forward segment 1mth, 3mth and 6mth annualized premia are currently trading at 4.10%, 4.14% and 4.20% respectively.

FX today experienced witnessed mixed market sentiment in Asia this Friday, with traders cautious amid heightening US-Iran geopolitical tensions, especially after the US suspected Iran behind the attacks on 2 oil tankers in the Gulf of Oman on Thursday. The biggest beneficiary of the geopolitical and trade risks was the traditional safe-haven Gold. Gold futures on Comex rallied and remained poised to test the yearly tops at 1356 levels. However, the safe-haven demand for the Yen remained muted, with USD/JPY holding ground near 108.30 levels. The spot was supported by positive US equity futures. The biggest loser so far was the Kiwi and headed towards 0.65 handle, in the face of intensifying recession risks in New Zealand following downbeat manufacturing PMI numbers that flagged further RBNZ rate cuts. The Aussie followed suit and hit fresh 3-week lows below 0.6900 levels on the back aggressive RBA rate cut calls. The Loonie traded on the back foot despite the renewed uptick in oil prices. Among the European currency pairs, EUR/USD and Cable traded little changed amid a broad-based US dollar consolidation.